I now these are supposed to have a soft pedal feel, but how soft is too soft?

Mine travels 3/4 to the floor before any major braking happens, it's working before then, but you can barely feel it unless you are cruising slowly.....

NOW, a good hard stab at the pedal, and it's right there, but still at about 3/4 way to the floor.....

I did get the E-brake working (the car sat for about a year before we bought it), so maybe I need to find a way to adjust the rear pads?

 

I would say that if the master cyl is full of fluid then your master cylinder itself is failing. Fluid is seeping internally past the rubber plungers. That is why it works when ya hit the pedal quick but fails when ya push slow.

 

Do you have power brakes?

Your brake booster might need replacing. Pretty common replacement, especially when the pedal starts going to the floor. Be careful, my friend had this happen to him. It was bad for a long time until he decided to take his car in. As I was leading the way in another car, I see him coming up behind me full speed while we're at an exit ramp and I was stopped. He barrelled past me out onto the street. Luckily there was no one coming and we were literally right down the street from his mechanic.

 

X2 on the master cylinder this has always been the issue when I have had this problem.

 

I figured it would be a M/C issue....

It seems to have gotten better feel by adjusting the rears up, but the softness (and most of the travel) remains.....

I know it's supposed to be soft and have some travel to it, but it seems a little too soft at times.....

If I could swap in the pedal feel from my Cherokee, I would be happy man.....