I've seen plenty of bigger people that kick ass in DDR, so that's no reason for your shortcomings in it.

Losing weight is no easy task. You have to burn up more calories than you take in. You'll have to change your diet...permanently. Not temporarily, that's why most put the weight back on. They don't realize a diet is something permanent. If you want to be more athletic though, you'll have to start working out, and it should help you lose weight. There's plenty of info on the web about exercise, look it up.