Yea, that was just informative. The lever feel firm throughout the whole pull but doesn't engage until the last little bit which makes me wonder if the problem is in the clutch itself which is why I posted on here.
Where does your clutch start to engage? Half way, 3/4 out, 1/4 out?
I'm seriously thinking I may need to pull the clutch pack and inspect but I'm dreading it. Would rather just ride!

But to fix that rotted out seal I have a rebuilt kit on the way. Figure if that seal is that rotted out then it's due for new seals anyhow.
Few truly worn out clutches have been reported here as far as I've read. I, and others, have had to replace damper plates in the clutch pack due to failed rivets that hold the damper plate together. But, the more-or-less definitive symptom of this is intermittent, but increasingly frequent, inability to pull the clutch lever all the way to the grip. That doesn't seem to be what you're reporting, so you probably do not have a clutch pack issue.
As Ricky-D indicates, the clutch should engage/disengage in the first inch or two of lever movement from the fully extended position. In other words, only if it is engaging/disengaging close to the grip should you be concerned (your initial state.)
Most clutch issues come down to fluid age/level, master/slave cylinder problems, or lever wear. Fluid age/level and lever wear are far and away the most common, and easiest to address.
You seem to have addressed the fluid age issue, just make sure the line is thoroughly bled of air.
The picture you included just shows a ragged dust boot. Not a big deal. The worn bushing that typically causes lever play issues is the brass insert in the foreground. Also there is a sleeve in the lever that the pivot bolt goes through. This can wallow out too, but is less common than the brass bushing wear.
Both lever wear points may manifest as "clutch in" safety switch errors before they cause actual engage/disengage problems. If the bike won't start in gear with the kickstand up and the lever pulled in, it's usually because the lever and the switch aren't getting along.