Glad to hear of your progress
The pads need to sit on clean metal -- if there is rust coating the surface , the pads will not grip -- or grip poorly
if the pads were too thick , then the brakes would be on all the time -- pretty sure this is not the case
the expanding part will move out about 1/4" -- so should be plenty of movement
you should get the feel of the brakes at about half way on the pedals -- feel the pedal get tight against the pads
the strongest part of the actuator is at the beginning of it's movement
if the metal parts are too worn and the actuator needs to move a lot
then the force is weaker against the pads
leaving the rubber boot out will allow you to see into the housing when the brakes are applied
this is when the housing can be milled down some to overcome wear
the caution is milling too much and binding the brakes when they are not applied
be sure the linkages are able to move fully and pull on the actuator rod enough to make it expand