My tip for European travel--don't. Go somewhere besides Europe, especially for long term trips. Cost is half in-country, can be the same for airfare. Culture is actually different as opposed to Europe which is basically America with older buildings. Backpacking around the Philippines or Vietnam or Peru will be much more rewarding and more educational as far as how the other half lives. You also get to live like a king---blow as much money as you want in bars, and eat whatever you want wherever you want.
With that said, I have taken exceptions to two major pieces of advice you give (didn't read most of it but these stood out). If you pay $1200 for round trip airfare to Europe, you are being ripped off. If you are a student you can get to London and back for as cheap as $450, without any luck your max should be $600 ($850 non-students). This is from the west coast. From London Ryan Air will get you to the mainland for as little as $20. If you plan on being a "backpacker," that is sleeping in hostels, you can get by comfortably on $40 per day. If you drink and want to be a bit more loose with cash, $60 is easy to do without much thought. $100 is ridiculous unless you're treating it like a 1-2 week vacation where you're treating yourself constantly. I doubt this advice is intended for that goal, though, because such a trip doesn't require so much planning.
edit: I should say there are exceptions, such as if you intend to spend a lot of time in Amsterdam or other select cities where accommodation is outrageous you will be hitting $100/day. Most cities in Europe, even the big ones, have 15 euro beds somewhere, though.