RE: Suspension Height and Sag
You are describing a common problem and it occurs for the reasons you cited.
I just dealt with that on my '90 Westy.  I put new springs in all around, a
set from Van-Cafe.com
Fixed the problem and improved the ride.  That the expensive way to go, see
the archives for discussion of inserting shims in the rear and other
approaches.
BTW, new shocks will not (or should not) make even a fraction of an inch
difference in the height.  They support nothing.  Though if your shocks are
old and worn out new shocks will make a BIG difference in how the Westy
handles and rides.