"I felt so alone"
And there's the problem. Games work in VR because its user-generated content with the VR as a backdrop. Avatars mean its more of a social thing.
Total immersion and isolation due to lack of avatars might be a powerful novel experience, but if you can't hear your wife laughing with you, its not going to be great. Add the avatars and communication and you get griefers and people doing silly dances at inappropriate times. Instanced dungeons may be the answer, but even then, party members rushing over to look at something in the world (or getting stuck in mid-air) may spoil the story being told.
VR and film are different beasts - do not mix fish and fowl. Unless of course, plot is not the point of the film, and there are genres where that is true.