[hemi43]

You are correct, the newer rear axle has a larger piston area. That truck you got that differential from also has larger piston area on the front calipers which is why late model trucks have a such a large bore on the newer master cylinders.
You can't just throw that newer diff in and expect it to work using the stock master cylinder because it wont give you enough volume.
I'm also running a 5.3/ 4L60E combo, and I updated my front calipers when I did the swap. I'm using 2003 dual piston calipers but had to also use the 2003 master cylinder because it has a 1 1/4" bore and more stroke than the stock one, which I think is only around 15/16".
As far as the proportioning valve, all it does is reduce initial shock to the rear brakes in a panic stop so that your back wheels don't lock up. It does not change pressure to the rear. Another thing that valve does is it monitor brake pressure on front and back. If it notices and difference, it will shuttle a valve and activate a switch which will in turn put your brake warning lamp on on your dash. This is what's happening with your truck.

You're kinda stuck now because you have mismatched brake components. Your rear brakes require the volume of a large bore Master cylinder, but your front brakes require a smaller bore( higher pressure, less volume)

If it was me, I would try and fit smaller bore wheel cylinders on the rear. A lot of these parts are interchangeable.

Edit; I just checked NAPA online, and the bore of the 1986 wheel cylinder is 1 1/16" . The bore of the 1972 is 1". Not a huge difference, but probably enough to screw things up. I would check to see if by chance the 1972 wheel cylinder from your old diff fits the newer 1986 from the Suburban.

Edit #2; 1986 Suburban with 11" brakes uses a 1" bore wheel cylinder, and I would bet that it's a direct bolt in. For less than $10 each I would be trying this route first. IMHO