If you think you truly know yourself, then I'd venture you've spent too much time naval gazing and whilst you might have the fluff-freest belly button on earth, I won't want to know you. Not only are you unnatural (not a sin in itself) but you are most likely the most boring person alive. That's the real crime.
Faults shape us, like the facets on a gem, they reveal the flame within. Without faults to distort perfection and refract light you are about as interesting as a pane of glass with a view--of any kind.
This relates to writing, how? Well, nothing is more deadly than reading about the piously angelic, Ms or Mr Perfect, that's point 1. Point 2 is, if your heroine/hero has faults and flaws, then they are unlikely to be aware of them. Keep your story real. Make sure your characters flow with blood not ink. Too much introspection on the path to self-knowledge is just not authentic. It's also filthy boring for the reader.
A lack of self-awareness sparks friction, you should be able to feel the rub of sand against sand in the interaction between characters as they blindly bumble through life, trying their best, but largely getting it wrong.
Not that people don't change, they do, they grow (not necessarily towards sainthood) but only in response to some trauma or challenge. Something they don't like, something that disrupts their peace of mind and prevents them from getting what they want, now! Even then, it's more a compromise than an outright change of who we once were. if you have a stinging temper and your current love interest reacts adversely, then the chances are you'll try and dull the sting. That's not self-awareness, that's compromising to get what you want, but the temper that is a part of you will still hold strong and there are times, even in the happiest of ever afters, that it will out.
If you've written a bitch or a bastard, chances are they are going to stay a bitch or a bastard. But in romantic fiction the reader expects someone to fall for the lead characters regardless. And if, as a writer, you've done your job properly, the reader will love them too, flaws and all.
If I've got this right, then a story spins more on convincing reaction than long term changes in personality. Maybe that's why series are popular. Readers go back to see how their old friends are faring handicapped as they are by faults and flaws, within a new dynamic.