Well, тебе is really in prepostional case (or dative). The problem however is that prepostional case doesn't work with the preposition "у". Therefore я у тебе is impossible.
This prepostion really can express the idea of closeness, but only in the sense of place, but not intimacy:
У вокзала стоит автобус.
And only following prepostions can be used with the prepositional case: в, на, о, по, при