Maybe brakes are too tight?

It sounds normal. What you are looking for in gliding is the "no arrows glide", which means no regen or motive power is displayed on the MFD. It takes the slightest of pressure on the accelerator to access this mode, and it can be hard to find under certain circumstances, like low battery SOC. Easiest is around 30mph with 6 or more bars on the display.

That said, I do seem to notice a difference in how the car glides at various times, especially when hot. Some have said that the brakes may need to be bled to release possible air that expands and causes slight brake drag. I am not sure yet, and it could also be just illusion. I drive in a hilly area and sometimes what seems level is actually slightly uphill. Still observing.

The brakes are sensitive, but initially that is regen braking, transitioning to friction, so not necessarily a symptom.

 

In most modern passenger cars, there is no such thing as manual brake adjustment... only parking brake adjustment. Modern disc brakes are self-adjusting; as your pads wear, the calipers automatically move to where they need to be for optimal braking. It's not rocket science, it's just a little rubber grommet that holds the calipers in place, and retracts them ever so slightly once you take your foot off the pedal.

So unless you're driving around with the parking brake on, the brakes aren't the problem.

 

This could also be an illusion in part.

It could be that you are reducing your acceleration, rather than decelerating. Think of a plane accelerating down a runway, you are pulled back into your chair, the plane reaches its desired speed, you ease back into your chair. You are going no slower (or decelerating), but the sensation of acceleration has passed.

This is particularly relevant given that you go on to mention "gliding" - as finding the 'sweet spot' often depends on traffic, weather, battery charge and general road conditions. I find that maximizing the benefit of this is an art in itself, as I'm sure many would testify.

 

You have drum brakes on the rear of your 2005 prius. They are auto adjusting, but could have been set to tight or auto adjusted too tight. You can easily check this by jacking the rear wheel off of the ground and spinning the wheel. If there is significant drag you have a problem. My rear wheels spin with little resistance and the drums can easily be pulled off of the axle. (disconnect all power before removing drums or discs). You can manually adjust the brakes so they barely contact the drums by turning the star wheel at the top of the brakes.

 

Not to worry ! It's all semantics.

You are certainly right in what you say regarding coasting. Personally, I found when I first got the Prius I "tried" too hard to apply all information I could and this over complicated how I drove which impacted upon MPG. I'd advise you read up on the practical advice across the forum - but then apply it to how you will use your car and the conditions you encounter. You will get the hang of it, and how to maximise it on your local roads and optimise for motorway driving.

I can completely understand what you're saying about the average MPG rising. The secret is, as you wisely point out, adapting your driving style to be easier on the gas and to make the most of the energy you've already accrued.

 

One other thing to check: be sure the car is shifted to "D", not "B". "D" is for all normal driving. "B" is only to save the brakes when coming down a mountain.