If you need more clearance for the brakes, adjust the cable at the straddle hanger (the triangular gizmo above the brake caliper), rather than use the lever release.
I agree the stem looks pretty long, and those are rather reachy bars as well. Too long or too reachy, I can't say, but the difficulty you are having getting comfortable seems to suggest it's not an optimal setup. Perhaps it was fine 50 years ago - most of us shrink a bit and lose flexibility as we age.