"You, he said, are a terribly real thing": This part of the statement underscores the authenticity and sincerity of the person being addressed. They are described as being genuinely themselves, unpretentious and true to their nature.
"In a terribly false world": Here, the quote highlights the contrasting nature of the world in which the individual exists. It characterizes the world as false or artificial, suggesting that many people may wear masks or hide their true selves.
"And that, I believe, is why you are in so much pain": This concluding part of the statement offers an explanation for the person's pain. It suggests that the discomfort and distress they experience stem from the inherent conflict between their authenticity and the superficiality of the world around them.