So you haven't been practicing for about 2 years? That's not so bad, I've heard of people picking it up again after a 20 year break!
Theory is very useful, not only for analysis/memory but also in sightreading - which is often a case of insta-analysis, it takes a lot less time to recognize a series of notes as a Gm chord than reading each individual note. It's a matter of developing focus and experience.
A few months ago I absolutely could not sightread at all... After a while of diligent daily practice, I am now able to sightread badly

Really though, there's been substantial progress. I found a bunch of easy, simple music and just got to work everyday, always trying to maintain focus and to read ahead. Using actual music was helpful too, it sounded better, I was actually able to get into it... Patience is important, it was frustrating being so bad at the first steps - being able to play so far beyond my reading capabilities, took a bit to accept. Eventually I started getting the hang of it, more flow, control, less having to look at the hands, recognizing more patterns.
How far can you go with little talent but lots of practice?hard to say, this is an issue that comes up often, in many guises... All answers are speculative. I know for sure that intelligent, focused practice always brings improvement, so my reasoning is that if you give enough of yourself to practice the sky's the limit.
It's great to have a goal, and playing the Waldstein is also a goal I plan on actualizing myself one day... But also consider that there is a lot of beautiful enjoyable music that you can play at every step along the way. No matter what level you happen to be at, you can make high quality music, being less difficult than the Waldstein doesn't diminish excellent playing.
Something else I didn't understand a few months ago but can now appreciate is poetry:
THE MAN WHO THINKS HE CAN
If you think you are beaten, you are;
If you think you dare not, you don't;
If you'd like to win, but think you can't,
It's almost a cinch you won't.
If you think you'll lose, you're lost,
For out in the world we find
Success begins with a fellows will;
It's all in the state of mind.
If you think you're outclassed, you are;
You've got to think high to rise.
You've got to be sure of yourself before
You can ever win a prize.
Life's battles don't always go
To the stronger or faster man;
But soon or late the man who wins
Is the man who thinks he can.
Walter D. Wintle