I first started working with Unity and then realized that I could not see how this could help me in getting into AAA studios as all there job requirements had stuff that I didn't learn in the process.
This is wrong.
Then it felt like making a game engine would help me learn better what those studios want.
Also wrong.
I then again decided to go into making games on a pre-existing engine, this time I took up Unreal Engine 4. But this time I have a better idea of what I want to do. I am interested in making game play logic, AI system, and on a side have fair bit of interest in modelling (not texturing) and animation. I may not be good at all this right now, but I have figured out what I have to do exactly, and on the side.
Moving in the right direction.
Now again I did end up one some companies job page(Naughty Dog, Santa Monica and Sucker Punch) and I found myself in the sea of confusion and hopelessness, half of the time I couldn't figure out what the requirements.
But getting colder again.
So my question is, is learning how to get complex AI running in UE4, setting up some nice game play mechanics in UE4, and setting up a nice UI in UE4 and creating some models and animating them in Maya will be enough to get me a job at some of the AAA studios I mentioned?
Maybe.
Here's the thing. If you want to get a job making games, you should make games on your own, with technology you know, and with skills you have or can learn and develop. Unity is a great tool to use; the idea that game developers won't hire you if you use Unity or that Unity can't teach you things applicable to game development outside of Unity is ridiculous. Lots of "AAA" game developers use Unity (or tools like it, such as what Unreal provides) and lots of what you will learn by making games in Unity can transfer to making games with other tools or technology. So don't let that sort of thing discourage you.
Making a "game engine" at this point in your career is likely a waste of your time, as to make one of those well you generally need to be fairly experienced with making games in general so you know the kinds of things an engine needs, the kinds of problems that crop up in real-world development scenarios, and the kind of pros and cons you want to focus on. Many people in your position who make "game engines" end up with something that's little better than a slipshod wrapper over Direct3D and a poorly-thought-out overengineered component-based entity system. That's usually not super impressive. It can be educational, but it's probably not the most effective use of your time, in my experience.
Don't stress too much over listed job "requirements" on websites. In many cases those requirements are inaccurate or at least flexible. In many cases companies only post jobs for specific needs they want to fill, even though they may be open to hiring more generally (e.g., junior positions, which you usually get so many of you don't need to explicitly post listings for). If it discourages you too much it's not helpful to obsess over them. I certainly didn't meet the paper requirements for my very first job in the industry, and I still got hired.
So yes. Think of a game you want to make, and make it. Using Unreal is great. Try to focus on making some smaller that is more complete over making something bigger but half-complete. The ability to show that you can execute on a complete project is pretty useful thing, and you will learn a ton that way. Keep making games, asking for help with things you don't understand, asking for ways to improve your code, and eventually you will develop your skills enough to reach an employable level. Going to college or university to study something related to the field (math, computer science, physics, et cetera - but the most important thing is that it interests you) can also help you develop.
I'd also caution you to temper your dreams about working at "AAA studios," or specifically studios that have shipped games you love. Loving a game made by a studio is not a great reason to want to work for them, and there's a very big difference between enjoying the product of a studio and being part of developing that product. Keep that in mind when you eventually go looking for jobs. When I was a kid, I used to dream about writing games for consoles because they were so cool and unapproachable. Now that I've done it, I hate it, it's one of the least fun parts of my job. Similarly, I've had opportunities to work at several studios that produced games I loved as a teenager, but turned them down because the actual working environment of the studios in question were toxic or otherwise unpleasant in various ways. It wasn't fun, and if I hadn't invested so much hope on those goals as a kid it wouldn't have hurt me so much as an adult to suffer that kind of disappointment.