I can't think of anything that could increase the fluid level in the MC reservoir. The pedal going to the floor indicates a bad MC (piston seal leak), so change that (life threatening!). The hard pedal is probably a bad booster, or lack of vacuum to it. If the MC was totally gunked up w/ rust, that could make the pedal hard, but I have never seen it.

I would change the MC first, since fairly inexpensive ($45 @ auto parts for my 300D's). If you still need to change the booster, you can leave the MC on the brake tubes and remove the booster separately. It is hardly any more work and changing the booster is expensive and fussy. Yes, critical to "bench bleed" the MC, at least 50 strokes until no more bubbles (see youtube). I prefer doing it on the car, using the pedal. You also need a good vacuum seal between MC & booster, which could be your "booster doesn't work" problem.

Brake fluid leaked into the booster on both my 300D's (leaking rear seal in MC), but didn't degrade the diaphragm. No idea how long is sat there. I changed to silicone DOT 5 fluid, which never needs changing. If using regular fluid (DOT 3, 4, 5.1), refresh your fluid every few years or you will get rust heaven throughout your brake system. Also, insure good rubber caps on the "level switch test" buttons on the reservoir top or moisture will diffuse into your fluid quickly.