Let's take your second question first. The short answer is that to fall short is an idiom. Picture a small creek, with children taking turns jumping over it. A child who does not jump the entire distance across, but instead lands in the water and gets wet, has fallen short of the other side.
Now imagine the St. James River. It's a fairly safe bet that no child will be able to jump across this river where it flows through Montreal, at least not in one jump. Any child (any human, for that matter) who makes the attempt will most certainly fall short of the other side.
Most children will be able to jump over a small creek, or if they can't make it the whole distance, they will probably be close to the other side when they fall in. However, any child attempting to jump over the St. James will not just fall short, but will be far from the other side.
Thus, "to fall far short" of something (a goal, an expectation) means not just to fail, but to fail significantly or spectacularly.
As to your first question: The meaning of I was to do something is rather nuanced. Let's look at both phrases side-by-side:
Later, I was to appreciate how far. . .
Later, I appreciated how far. . .
The use of the infinitive here is usually to indicate that the speaker's viewpoint changed. It carries connotations of "I didn't understand it then, but something helped me to understand it after some time had passed". It also connects the events of the past to the realizations of the present.
Additionally, the infinitive can imply that the speaker was not solely responsible for this change. To most English speakers, it says something like this:
Later, however, someone/something helped me understand better just how far short. . .