First, let's translate the "three levels of distance".
aquí - here, allí - there, allá - over there
For these scenarios, let's pretend I'm talking to you about a gift. 🧍🏽♀️---> 🧍🏽
If the gift is close to me (aquí) I'm going to use a form of "Este, Esta, Estos, Estas (this)" to point to something near me or in my hand. 🧍🏽♀️🎁 ---------> 🧍🏽
If the gift is closer to you (allí) I'm going to use a form of "Ese, Esa, Esos, Esas (that/those)"
🧍🏽♀️-------> 🧍🏽🎁
If the gift is far from both of us (allá) I'm going to use a form of "aquel, aquella, aquellos, aquellas (that/those over there)" 🧍🏽♀️-------> 🧍🏽-------> 🎁
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That blue tie (allí) - "Allí" let's me know that the tie is closer to the person I'm talking to, so I need to use a form of "ese". "Tie" is "La corbata" so I know it's singular and feminine so I'll use the feminine form of "ese". The answer is = Esa corbata.
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This green hat (aquí) - "This" and "aquí" let me know that the hat is close to me or maybe I'm wearing it! One word for hat is "El sombrero" = Este sombrero.
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That yellow dress (allá) - "allá" lets me know that the dress is "over there", not just "there". = Aquel vestido amarillo.
...
"This" will always go with "aquí" and its the easiest one.
"That" is tricky because it has 2 translations, "Ese" and "Aquel".