So I've recently picked up guitar again after 3 years of not playing and I finally realized what has been preventing me from moving forward all those years. Tension and stiffness, in my right hand especially. I've noticed that by finger picking certain songs without a pick are almost easy as breathing but whenever I try to play these same songs with a pick, using alternate picking my hand just tenses up like crazy and i can't increase my speed or rhythm at all cause I am simply to tense. How can I fix this so that i can freely move my picking hand without all the tension and stress?
It's kind of hard to give you recommendations when I don't know exactly what the problem could be. You could try searching first, to see if anyone (and there are many people) has had the same problem, and find help that way.

What I can tell you is to play slow first, and focus on your picking hand technique. Play loose and from your wrist. Then slowly speed it up. Perhaps when you get to faster speeds, your technique is not yet good enough for that speed, and hence you tense up.

Keep practicing, and start over from scratch and correct your technique.
Tense up your arm as tightly as possible. Now take a deep breathe, then release both the tension and your breathe at the same time.

Now do the same thing, but holding a pick. You shouldn't be gripping the pick so tightly that your entire arm is tense. Get used to the feeling of holding the pick without tension. Practice your picking motion slowly and focus on being tension free when you make the picking motion.

If that doesn't work, there isn't a whole lot else I can tell you. If the tension is constant, that's a medical issue, not technical. If it's only when you try to use a pick, it's technique and those little exercises I told you ought to help get you used to being tension free when you pick.
See Rob Chappers on youtube i had the same problem and after viewing his blog it revolutionized my playing.