I'm walking tall, head in the air - living life awake and alert.

Does "head in the air" mean "with pride"?

Does it mean that I live being focused and watchful?

'Focussed and watchful' is closer to the point, but those words are too careful and defensive. 'Head in the air' means open, confident and pleasantly observant of everything around.
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Head - in - air

It's good that you asked.

B/C "Head-in-the clouds" means the opposite! (Distracted)

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