As you can see by my attached chart, both my "not selected" and "indexed" pages have both been dropping over the past couple months. I have new content every day. What can I learn from this? What can I do? Have I been penalized?
You may be experiencing a "Google Dance". Due to the fact the Google algorithm is being updated daily it is necessary for the results to be updated as well. Now, regarding the unique content, i think this had been miss-understood because, not only the unique content matters, there are also the other 200 factors from the offline optimization + online optimization. Make sure that you have the following: unique content (and readable + useful), dofollow backlinks with a high pagerank and related to your niche (make sure not to spam) and do useful comments, page speed (offline optimization factor, that is very important) i would suggest on checking your site speed with gtmetrix and do the customizations that they require in order to have a better speed. Additionally make sure you don't have more than 1-2 banners or flash elements in your website. Google usually loves a lot html website with less javascript and NO iframes.
Google dance before, if this problem is is still occuring in 2 weeks i advice you contact google via webmaster tools