No, you're confusing two different distinctions.
What I think you're going for is the difference between
I was reading the book last year
I read the book last year.
The first is treating your reading it as an extended activity (it doesn't necessarily mean that you didn't finish it during last year, but that might be the case). The second is regarding it as a completed action. You could use that even if it took months: the difference is in how you are choosing to talk about it, not in any objective difference in what happened.
The distinction in the words you are using is between:
I read/was reading the book last year.
I had read/been reading the book last year.
This is the distinction between the simple past and the past perfect (and is indpendent of the choice of simple or continuous, which is why I have put both option in both sentences).
The difference is that if you use the past perfect, you are looking at the event from some point before now, but after the reading. If you have not already established the "story time" from which you are regarding it, then there is no point in using this form, and it would be confusing.
A context where you had established the "story time" would be:
Last night my friend asked me about his favourite book. I had read the book last year, so I could answer him.
Even in this context, "I read the book last year" would not be wrong: it is almost always a stylistic choice whether to use the past perfect or not.