Bleeding Brakes - Do i have this right?

You got it! just make sure to keep an eye on the fluid level in the MC. If you run out of fluid & suck air... you have to start all over again.
Also, keep pressure on the brake pedal untill the other person tightens the bleeder screw all the way in, then it's ok to start pumping again.
Good luck!

I would say its due to your seized adjusters. Without them adjusting, the lower ends of the shoes will stay the same distance from the drum, hence only the top part of the pads where hitting the drums, especially since the cylinders are only pushing the top of the pads apart.

When you bleed your brakes, I would suggest you go to your local pet store and pick up some air-hose. Its just about the diameter of the bleed nipple on the brakes. Stick about 2-3 feet or more of the tube on the nipple before you start bleeding the brakes. It will not only make it easier to confirm that there is no more air in the line, but it will also help to minimize the reintroduction of air into the system should communication break down between the pedal pumper and the nipple bleeder lol.

i think using a Miti vac is much easier. you can also make one of Jrichker's pressure bleeders to do it from the master cylinder (kinda like brake shops use).

i often wonder if i disconnected the lines to the rear drums, if i would notice a braking difference. LOL.

on your rear shoes moving around - they always do on every brake job i do on shoed cars (have several cars with shoes). the cylinder is super simple. normally they leak when they go. but i dont think your experience with the shoes moving around (and having to wiggle them around to get things to line up and get the drum back on) is unusual.
good luck.