Using ATF-4 has no negative effect on the trans as a whole - in fact it has many benefits.

This trans has a governor pressure control solenoid - run by the PCM - if it had no electrical control it would default to third gear and you could still manually pull it down to low and launch the vehicle.

The other two solenoid are overdrive and lockup - simple on/off solenoid where the governor pressure control solenoid is a duty cycle (modulated) solenoid.

Since you have the valve body down just reduce your air source to 30 psi and apply the rear clutch and front clutch. Applying both of these one at a time should give you a good feel for proper application. You can hold the rear clutch retainer while applying it and you should feel it move while hearing it apply. The front clutch generally doesn't move much since it's riding on the pump support and the piston inside is just clamping the clutch pack.

Two seals on the input shaft - the rear small one and a large one on the piston support plus two lip seals in the rear clutch to apply that clutch assembly. Check the accumulator piston to make sure those seals are good too.