I'm in the middle of editing my second book. A book I think is absolutely fabulous -- I think it's wrong to love your own writing this much -- and I'm afraid that eventually, I will be brought back down to earth. Ah, well, I write because I have to. If I didn't, I would go crazy. My characters want me to tell their story. So what option do I have.
Now, about characters...what can I say about characters? I think this: You know your characters are real and you know them well if they manage to surprise you every once in awhile. I love writing a chapter, and in my mind I know exactly where it's going, and then bam! my character pulls a stunt. Although I'm the writer and I could just push the delete button on their actions, I know I can't. Because I know that's exactly what they would do in that situation.
I just have to change the plot to match the characters.
That, in my opinion, is how I know I know my characters really well.