It will never be that loose because the spring is holding the lever against the rod.
Yes, the total pedal travel is just what you said.
If you look up near the top of the pedal arm just below the pivoting point under the dash, there is (or should be) a rubber bumper that stops the pedals upward (toward the driver) travel. This bumper is on an eccentric bolt so as you twist the bolt it moves the pedal closer to the floor or farther away.
Generally speaking, you start with the bumper adjustment, get the clutch pedal as close to the level of the brake pedal as possible (for a starting point) and verify that the available travel from there to the floor is no less than 6 5/8"
Easy to do with a tape measure. You don't have to be precise down to the thousandth of an inch here. Just get it within that range somewhere and you're good.
Then you measure the pedal free play (with your hand is best usually) by lightly pressing the pedal until you feel it stop up against some heavy resistance. Should have at least 1 3/16" before you feel resistance.
If you feel less than 1 3/16" that's when you adjust the rod down at the clutch release lever sticking out of the bell housing.
The "free play" we're talking about here is the distance, or gap, between the throwout bearing and the clutch cover fingers/springs. The bearing can't handle spinning all the time or it will wear out quickly. So this free play you can feel up at the pedal is always very important.
I believe the reason for doing it without the spring installed is more for ease of adjustment than for any truly technical aspect regarding the function.
But I could be wrong, so maybe someone can verify.
Shortening the rod should increase free play.
Paul