Let me give you a thorough breakdown of this problem, because there are actually several layers to understand.
First principles:
The definition you're working with is correct, but there's a subtlety most textbooks gloss over. The limit has to exist AND be the same regardless of the path you take to approach the point. In one dimension, there are only two paths (from left and right), so checking those is enough. In higher dimensions, there are infinitely many paths, which is why multivariable limits are harder.
For your specific function:
Try approaching along the line y = mx. You'll find that the limit depends on m — different slopes give different values. This immediately tells you the limit doesn't exist. This is the standard technique for proving a multivariable limit doesn't exist.
A deeper insight:
The reason this happens is that the function is not continuous at the origin. The limit depends on the angle of approach, not just the distance. Functions that are well-behaved at a point have limits that are independent of the approach path. This is equivalent to the function being continuous at that point.
Practical advice:
When you're faced with a multivariable limit, first try approaching along a few simple paths (x-axis, y-axis, y = x). If you get different values, you're done — the limit doesn't exist. If they all agree, you still need to prove the limit exists using the epsilon-delta definition or by bounding the function.
There's no shortcut for the existence proof, but the squeeze theorem (sandwich theorem) often works well. Find upper and lower bounds that both approach the same value, and your function is squeezed between them.