Perfect size. In the photo, your saddle is too high, and by a good bit, but drop and reach look really good. That's the way it's supposed to look. Your upper arm is supposed to make a right angle with your straight torso and that's what you have.
You would be more comfortable if you flattened your back. All the way from the top of your shorts to the back of your head should be a straight line. If your back doesn't like this position, it's not the fault of the fit, it's that you have a weak back. Strengthen it by riding lots.
I once had a bike much like yours and never did succeed in ripping the bars off it, no matter how hard I tried. Modern threadless stems and headsets are much stiffer. You could put a threadless adapter in there and put on a stiffer forged alloy stem, could also get you a little lower in front. You might like that. It's fun to go fast. That's a welded stem you have here. I've ripped the weld almost off a stem just like that on a much newer carbon bike and fortunately didn't die. Get rid of that stem.
Out of the saddle, there are two pedal strokes, rest strokes and power strokes. During rest strokes, you put even pressure on the bars. During power strokes, you pull up on the bar that's on the same side as the downstroke pedal. Try riding in the drops while standing and keeping your butt far enough aft that you feel the saddle horn just touching the back of your thighs as you rock the bike.
I have a bike fit primer here:
https://www.bikeforums.net/21296948-post3.html