Emergency Brake Not Engaging but "Release Parking Brake" warning stays on 100% of the time

You wont like this answer, but bring it to the dealership or a independent shop. Something like this isn't worth the time to DIY

 

Our state law (Cal. Veh. Code §§ 26451, 26453) says that you do.

If you don’t want to take the car to a dealer or shop, as @Pulse07 kindly suggested, then start by checking the the No. 1 wire adjusting nut at the end of the parking brake cable. It’s shown in catalog Figure 46-01, Parking Brake & Cable, with part name code 46441, and in the Repair Manual (more info) topic Brake: Parking Brake: Parking Brake System: Adjustment, which gives the standard pedal travel, “8 to 11 notches [i.e., clicks] at 300 N (31 kgf, 67.4 lbf),” and states, “The brake warning light always illuminates at the first click.”

It’s not in the Toyota manuals, but before you spend any time staring up into the underside of the instrument panel, I’d suggest to disconnect the negative (–) terminal of the auxiliary (12-volt) battery and wait for at least 90 seconds. Disconnecting the battery de-activates the supplemental restraint system, which reduces the risk of serious injury if the driver side knee airbag were somehow to fire while you’re down there.

 

This issue sounds a lot like one I'm currently experiencing. Out of curiosity, did you try lifting up on the pedal from underneath? I had intermittent issues with the ratchet not catching and then when several applications back and forth got it going again, the light/sensor stays on even when the parking brake is disengaged. If I lift up from the underside of the pedal, the light/sensor go away.