Joe - I do everything you show but I have one more additional step. I place a piece of wood in the caliper bracket, then pump the pistons as far out as I dare to effectively clean the whole piston. The thickness of the wood is a trick. It's thin enough to allow the piston to extend out a ways, but not too far to allow them to pop out of their seating.
Not bad... so the rotor thickness plus the base of two brake pads should do.. I've seen a bike come in with no pads left and pistons were sticking so maybe add just a hair to that... 1/4 inch..