I'm not entirely following your post, but it seems the brake lights are on all the time now? That switch needs to be adjusted when it is installed, and it is retained by a spring-steel clip that grabs the outside of the switch body to hold it in place. Normally, you just install the switch by pushing it in until it bottoms against the metal "L-bracket" that is on the side of the pedal.
If there is still a large amount of clearance, either the switch isn't pushed in all the way, or it is the wrong switch. A side-by-side comparison of the old and new switch would be in order.
I have never known an instance of a low-resting brake pedal being caused by air in the system. A master cylinder has a strong internal spring that forces the piston back, and the brake pedal as well, through the power brake diaphragm. It is possible to pull back on a brake pedal and get rearward movement, but that is not a valid test, as it just pulls the actuator rod out of the booster and does not affect the cylinder itself.
If you remove the master cylinder from the front of the booster, you can visually check to see that the cylinder piston is bottomed out all the way rearward in the body of the cylinder.
Bottom line is, something else is amiss. I don't recall myself if there is a rubber pad on that bracket, but I don't believe there is. I could be wrong on that though, I was wrong once before.