how do you get to the point where you don't even have to think about which chords to use - where you can just listen to a song and pull off its chord progression pretty much instantaneously? is there some way to get there faster or do you just have to play for a long time?
would you recommend just going over all the chords and alternate voicings a couple times each day?
If you can do structured practice like that then yes. I myself am not big on structured practice. I played a lot of songs with open chords and eventually it came naturally. You can also try and guess the chords being used and then confirm them via the tabs to kind of check yourself. All in all, as always, it just takes time.
I remember when I first started being able to pick out specific chords in songs. I'm no master, but at this point I can listen to a song and have a pretty good idea about what the chords are. The best thing you can do is just play. After playing for so long you begin to become acquainted with each chord's sound and will be able to pick up on it when you hear it used in a song.
Practice with ear training software likely wouldn't hurt, either. Not a magic bullet or anything, but I find that regular practice with ear training software gives me steady progress.

If you don't have one already, there's a free and open source program for ear training that works on Windows and Linux (maybe Mac too, can't recall).

GNU Solfege: http://www.solfege.org/

Not as fancy as some other commercial ones, but the price is right and it does the job admirably.

EDIT: I should note that transcribing music is possibly the best ear training possible.
Ive just been moving along the fretboard, following major patterns in whatever root note (key) I start in.

say I start on the 6th string, 5th fret, thats A, so ill play a major chord there, move up 2 frets and play a minor pattern, 2 more, another minor, 1, major, etc.. At the same time as its helping me with chord changes and different voicings, its helping me learn the notes on the fretboard as well. Seems to be working pretty well for me so far

Are you telling me theyre out of dragons?
They never had dragons..
Who didnt?
The world..
thanks for the help guys! i'll try what you suggested and hopefully i'll improve over time.
You first want to get to grips with types of chords. Minor 7 and Dominant 7 sound completely different. You also want to get to grips with how each note sounds. If you practice enough you can start to hear the differences in each note. You'll get to a point where you'll go 'yeah now that is a dom7th chord, and sounds pretty much like an A' then you know you'll be close-ish.