Holy cow, either Sky is ridiculously long necked or those reins were only 6' long. Myself, I prefer 8 feet, just so I have plenty of slack.
You look pretty darn good for the first time doing it. Like everyone else said, let the stirrups out a hole or 2 and RELAX! Let your leg come forward just a bit and let that heel drop. Straighten out that back and relax those hips and you'll be perfect.
That saddle would be just a touch too small for my taste, but like BSMS said, some folks like a smaller saddle. If you were feeling a bit squished in that one, you could likely go 1/2 to an inch bigger and still be in really good shape.