Can't tell the difference in pronunciation.
I understand that this is a context thing, but I find it extremely hard to tell the difference in subject for most of french. Je lis, tu lit, il lit, nous lisons, vous lisez and ils lisent, basically all sound the exact same.
In the real world if someone points at a kid and says il lit, I'll obviously understand the context, but with just text its hard to understand. Is there a difference in sound my ear is just not picking up now? Or will even sentences eventually become contextually understandable?
I just feel like I'm getting a lot of answers incorrect because I can't tell which form they want me to use.
Sorry, but I didn't understand the question. What sound the same? If it's the "lis/lit" conjugations, you are right. The pronunciation is the same. You recognizes the difference of "lis" and "lit" by the subject. If it is "Je", then it is "lis", if it is "tu", "il", or "elle", then the spelling is "lit".
Ils lisent and Il lit/elles lisent and elle lit can be very confusing, but you can try to listen to the end of the verb, when the '-sent' would be pronounced as a 'z' sound at the end of the word, and the '-t' would be silent. In actual spoken French, though, the context would make it more obvious :)
In the case of lire, you can tell the difference between lit/lisent by the pronunciation, as Fun-sized_Genius said. However, in many cases you can't tell the difference, as in the verb danser (to dance): il danse / ils dansent. In this case, the pronunciation is the same. You have to use the context to differentiate between them (like when, in English, you use the context to tell the difference between "you" singular and "you" plural).