This is a good reply, and is my overall point.
To be more specific in places, it sounds like if the person you rejected "wasn't holding out for a relationship" then that means they accepted your rejection and are friends anyway. That's good.
If they were your friend in the hopes that you'd change your mind later, that's bad. That's just "if I hang around here for awhile, he/she'll eventually see my side of this."
edit: I mean, treat this like a Bioware dialogue tree. You should always just explain your feelings, and if those feelings are unrequited, then you've got 3 options:
1) You can live with that and still be around so you say "I totally understand, we're still good friends and can stay as friends."
2) You can't live with that because your feelings are too strong so you say "I totally understand, but since I don't think I can handle a close friendship with you and these feelings then I don't think we can keep hanging out."
3) You can't live with that because your feelings are too strong so you say "I totally understand, we're still good friends and can stay as friends." (Lie)
Option 3 is the one that gets you Dark Side points here. You are objectively lying to this person from the minute you continue to be friends while expecting you to be more than that in the future. You are hiding your motives in sticking around. This is not cute, it's manipulation.