Trying to figure out how to make it "tighter". pads are in very good condition, fluids are full, but i have to push down pretty far to get it to engage....
how do i adjust it so its better?

 

The only real adjustment is for height, but that won't make any difference to your brake performance. There are two things you can do. Change the pads, if you want more bite, then a "softer" comp would be better. & you can have a braided metal line replace the standard one.
Depending on your riding style, depends on wot sort of brake pads you should get. http://www.ebcbrakes.com/mcstreetpads.html

Could also be that you need to bleed your brakes, they could have air in the lines & the fluid may be to old as well.

 

if the pedal feels soft..bleed the rear brake...if not, there is an adjusting bolt in the botton of the cylinder