Power steering fluid though seemed to fluctuate in the reservoir level.
Cold pre drive- Fluid is at low level line in reservoir
Hot post drive- Fluid is in the middle or near max level in reservoir.
Is this normal for power steering fluid to fluctuate like this in the reservoir?
Yes it is NORMAL for the power steering fluid level to vary between the low and high range. The main reason is heat. Hot fluid expands.
The level will also vary depending upon IF the motor is running or not. Or if the steering wheel is turned. Or if the brake pedal is depressed.
As long as the fluid is within the range it is OK.
Being slightly over filled will not really hurt anything. And certainly wouldn't cause the brakes to drag.
Being slightly under the low line won't hurt anything either and won't cause the brakes to hang. Being under full will matter if the level gets low enough to draw in air which would likely cause the power steering pump to make noise.
Remember that there really isn't a ton of fluid in the power steering system. Any leak can normally be located via a visual inspection. Just look for the oil stains.
FWIIW, the rear brakes are supposed to be smaller in the rear. Most of the stopping power is from the fronts. If the rear brakes were the same size as the fronts likely the rear wheels would lock up WAY before the fronts. The results would not be pleasant.
Have you flushed the brake fluid yet?
Have you TESTED the piston and slid pins for free movement? Remember that it would be EXPECTED to have hanging brakes IF the piston or slid pins can not move freely.
Regarding the hydro-boost. When you use the brakes do they feel like power brakes? If so, then the hydro-boost is working at some level. If you want to know what non-hydro boosted brake feel like then turn the motor off while moving. Pump the brakes a few times. Each time will use up more of the reserve (the cylinder on the side of the hydro-boost unit) until after several pumps the brakes will be all manual.
I just don't see a dragging brake as a hydro boost problem. But why guess? Test. If it's hydro-boost that is applying the brakes THEN there should be pressure in the brake lines. In fact, if hydro-boost is dragging the brakes then why aren't all of the brakes dragging? Want more proof? Then open the brake bleeder with the motor running, If under pressure the fluid should squirt out with some force.