Wiggle room is still sort of vague. Does it wiggle side to side or is it the wiggle room when it doesn't retract all the way? Retraction occurs when the spring on the brake caliper(the brake arms that the pads ar attached to) pulls the brake pads away from the wheel rim when you let go of the lever. It sounds like something is preventing that from happening. The brake caliper spring may be weak, the bolt on the pivot may be too tight, the cable may be worn out or dirty. Something in the system is dragging. Try to detach the cable and check each part for smooth operation and lubricate everything except the pads. I bet that will work.