How to use "you know"

For a non-native speaker like me, I am always wondering how to use you know correctly, as in the following sentence:

Alright, well, for example, like on Saturdays, y’know, what I liked to do was probably what any, y’know, little boy used to do. I liked to go out, play with my friends, y’know, play some baseball or some football or, y’know, just, just hang out with my friends.

Is it overused? Why do Americans use this phrase so much?

I agree that most of the time "you know" is meaningless filler, and as such is quite overused, but there are also other uses.

"You know" can be used to refer to an idea that may be difficult or tedious to express in words but that the speaker thinks is relatable, so in this context it means "if you catch the gist of what I'm saying, I'll omit the explanation" or "do you relate with what I'm describing?". This can indicate that the speaker is unable to express the idea in words or simply does not wish to. For example,

So I'm walking home from work, when all of a sudden I get this tingly feeling, you know? Like someone's watching me.

Or

Person A: Why didn't you tell your wife about it?
Person B: Oh, you know... it's complicated.

It can also mean "I think you should know" or "for your information". Examples:

You know, if you don't shape up soon, I might be forced to fire you.

If you keep doing that, you'll catch a cold, you know.

It can also mean "come to think of it" when introducing a sentence:

You know, that's really not a bad idea.

It is a message-free pause token. It is a vague signal for affirmation, as in, "do you understand what I'm referring to?", but it is mostly just filler while the brain catches up with the mouth.

It is absolutely overused, but every language and dialect has this kind of filler. I train myself and my kids to merely pause when I am inclined to use it.

It seems to me that as Americans, we overuse it in a context where you don't really know. If we are being so vague or confusing that our listener cannot understand, we should clarify directly instead of pinning someone into agreeing when they may in fact not agree or understand.

I don't mind it being used once in a while, and I use it myself, but in your example, using it once may make you sound like a native speaker. Using it that many times would make you sound a bit daft.

When used in excess, these fillers are very annoying. However, our ya'knows, umms, and errs do serve various communications purposes, some of which are discussed in the paper Disfluency Rates in Conversation: Effects of Age, Relationship, Topic, Role, and Gender (PDF).