1.Your plumbing drawing says 10 Lb residual, I guess it's there or built in? Also says you can use a "T" in front. Residual is just a big long fitting at the rear port.
2. Nice to buy all at one place!
3. Be careful taking instructions from a supplier that did not supply the parts.
4. 12:00/12:30 sounds like 180 degrees off, Are you saying the bleed is down at the bottom, close to the ground type bottom?
5. The tight shoes will not hurt and are necessary for now to be sure it's not that. Once found, can go back and loosen a little if you want. You are correct, they will conform after a while.
6. The vendors are going to blame the other guy.
7. "Valves won't fix spongy pedal", tightening shoes won't fix spongy pedal, flexing plate won't cause spongy pedal.....air in system will cause spongy pedal, bleeder not high up will cause air, leaks will cause air. Dads is correct, now you have to see if bubbles come out, can't do a leak to ground bleed. Have to have a method that you can see if air is purging and then sucking in again. Because that's what it seems like. It would be odd to be getting air in and no leak. But the fact is spongy is air, unless contamination.