Can a brake have too much fluid?
 

Like the title says...
I was messing around with the new to me Louise FR brakes and noticed that the rear need new pads, they came with 2 new sets of pads so I threw a pair in. It was a ***** to get them mounted in the first place and once I did they are so close that a rotor hardly fits in (it doesn't turn and they have to be yanked out). I followed the manual's instruction to open them up but they keep moving back to the same squeezed position. The only thing I can think of is that when the hose was replaced (the front and rear don't match) who ever did it bled the brake relative to the pads that were worn to nothing and when I put the new thick pads in there it there just isn't enough room. Is this logical?

Yup, sounds logical to me. Just bleed out some fluid until everything is hunky-dory.