With you bike being 7 years old, this is what's happening -
1) You have a buildup of dirt & corrosion on the caliper piston.
2) When you reinstalled the tire, and 'pumped up' the brake, you drew air into the system because of a low m/c level.
Easy enough to fix.
#1 The accumulation of brake dust and dirt around the exposed circumference of the caliper pistons can cause the brakes to drag. Whenever I change pads, and sometimes more often depending on what I see, I take a toothbrush, cloth, and brake cleaner and remove all dirt from around the pistons. I do this by forcing each piston in turn ALMOST completely out of its cylinder. When you can rotate each piston by hand, it is out far enough. Make sure it is as clean as possible completely around its circumference. If you have never done this before be careful, as it would be easy to injure your fingers, If you go too far and force the piston completely out, it's okay. Just clean it really well and push it back in. Check for
burrs, raised edges or deep indentations on the rod which guides/supports the brake pads. A good cleaning and a few strokes with a points file will take care of the rod.
#2 - You'll want to not just bleed your brake, but actually replace the fluid by bleeding until the fluid coming out is clear & clean.
I expect this will fix your problem. Ask Santa to bring you some new pads....