He sounds pretty harmless to me. I think he's has just withdrawn into his own fantasy land obsessing about having a sexual encounter with someone like you. He's probably had limited interaction with other humans, so doesn't realise that he's overtly stalking you, or realise that you notice him stalking you.
I used to know this guy that would follow this girl around wherever she went. He thought she never knew he was following her.
Best way to handle it? Confront him about it in a sensible manner. Tell him he is stalking you and making you feel uncomfortable. He needs a reality check to be honest. If you don't, he's just going to do it to someone else, and might end up getting seriously hurt.