Excellent trip report.
We did a similar trip last September and absolutely loved Peru. We had never been to South America but now we would love to go back. We also stayed three days at the Sandoval Lake Lodge outside of Puerto Maldonado and it was amazing! For the Sacred Valley, we based ourselves in Ollantaytambo and loved it. It was very convenient to get everywhere and we felt very safe walking around town, even late at night.
If you are not in good shape, I would skip Huayna Picchu. We are in our twenties and it was more difficult than people made it sound. It was beautiful, but we were dead tired after and it was the only time I felt we were affected by the altitude.
We chewed Coca leaves to help with the altitude, but like you I didn't think it helped.
If anyone is interested, a lot of places had donation boxes for the people in the area (example is Hearts Cafe in Ollantaytambo). They collected warm clothes, hiking shoes, and school supplies. The people in Peru were amazingly gracious. One other thing to keep in mind is that while bargaining is expected in the markets, these people are generally poor people trying to make a living. Is it really worth it to haggle over to a couple dollars? This is especially true when you are dealing directly with the craftspeople who are selling their own wares. We bought a beautiful woven piece that I was bargaining for, when my SO told me to just pay her the price she wanted. I was so into the bargaining, but he was right. The $40 made very little difference to me but she was so happy when she made the sale and it probably did make a difference in her life.