If both sides are identically equipped (pads and rotors) but one side is hot, it is almost certainly the caliper. Reducing the fluid won't change anything. You might try removing the caliper, cleaning out any gunk, greasing with Volvo brake pad grease (very carefully, this is not normal procedure) the slide surfaces where the caliper halves come in contact. You also put this grease on the backs of the pads, I assume? (If not, you might start here. This is required procedure - the pads need to float a bit on braking.)

Generally, I recommend the Volvo pad because it is a softer, heat absorbing compound that has excellent stopping power, reduces rotor heat, and has a squeal factor of zero when properly installed. Performance pads are often noisier, and are less absorbant of heat (rotors run hotter); but they do produce less dust. Me? I prefer the dust.
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David
1998 S70 T5SE // misc mods (mostly lighting) // red calipers // Michelin Pilots
1992 940 GLE//SilverStars//Hella MicroDE foglights//170K