As a fisherman, I prefer to have my entire reel covered, including the handle. That is probably why I am still using commercially made covers. If I ever get that far down my project list, I think I would go with lighter leather to reduce the bulk and figure out a way to cover the handle, too.
I like your overall design; The main idea with reel covers is to keep the dirt and grime out of the mechanism and protect the reel from getting banged around during transport. You have succeeded! You don't want the cover to be too well sealed. that would retain moisture from the reel, line, etc.=bad thing. I like Saddle-Lac, durable and relatively water resistant.