Update:
It's actually the threaded part of the pedal itself that touches the chain. It's a wee bit too long and a washer or another set of pedals will do.
Also moved the brake pads a bit and the braking improved. It's more smooth, but the braking power itself is still somewhat weak.
Others than these problems the bike itself is a good ride.
Those are the original brakepads? Replace them with Koolstop salmon and the braking will be much better.