The reason for Germany being at war with Britain boils down to the British guarantee of the independence of Poland which Germany broke on the 1st of September 1939, and by 3rd September Germany ignores the British ultimatum to leave Poland and ergo we have the start of The Second World War. I'm guessing your interest lies primarily though in the initial delay and the eventual indefinite cancellation of the German plan to invade Great Britain (Operation Sealion or Seelowe to use the German). There is extensive and very fascinating literature on the events leading up to and the planning of this invasion. But essentially it all boiled down to the same problem Napoleon Bonaparte had faced during the Napoleonic Wars, invading the British Isles required control of the English Channel or else the transport ships would get decimated by the British fleet.

In its most basic form the German plan called for control of the air over the Channel and Southern Britain (an example of the acknowledgement of the superiority of aircraft over big navy ships). Thus the Germans would only invade once the Royal Airforce was defeated or sufficiently weakened that they would present no threat to the German Invasion. To put it bluntly this attempt failed and we have the whole History of the Battle of Britain which covers this. Without air control, Operation Sealion was delayed and once the war with Russia began, the enormous resources and manpower that it needed meant that the operation was postponed indefinitely and the Germans focused on defending the Atlantic Coasts of the Reich rather than an invasion of Britain (Read up on the Atlantic Wall project if you're interested).

I don't know what Hitler thought of Britain, although I'm absolutely positive he mentions it a number of times in his writings and speeches. If you're really interested I can give an outline of the major points which Hitler felt towards the UK and the concept of the British Empire and the German Reich. If you're interested in knowing more about what a German occupation of Britain would be like, do some research into the occupation that occurred in the Channel Islands during the war, these were the only parts of the UK to ever be occupied by Germans. There's a lot written on it and even an excellent BBC series that explores the idea of British collaboration with the Germans. Hope that answers some of your questions:)