yup, definitely fluid. I had a similar issue where my brakes were pretty soft and spongy. The fluid levels were low so i refilled them and now it's back to normal.
Your rotors are warped. If you have enough left, you can turn them to flatten them out. Most shops will just replace them
If it truly is fluid, then he'd also want to make sure there is no underlying issue as to why the fluid levels are low (e.g. leak in the brake line).
Sounds like a fluid problem, it's either low or you have AIR in the lines. I had an issue similar, but it happened all of a sudden. My Master Cylinder needed to be replaced, because it leaked out the brake fluid. I found myself with NO breaks on my way home from work one day....that crap was scary.... That reminds me....I've started to hear the squeak of my brakes, probably time for a new set of pads..... I've had the rotors machined before in the past, getting close to the time to sell / trade in this truck before another expensive over haul is needed. (2004 F150).
I had something similar when I first bought this truck (used). The rotors were warped, and needed to be machined (smoothed out). Brake Check wanted to sell me new rotors saying they were too thin to machine..... Ford dealership had no issue machining them.....always get a second opinion....
Ouch. A bit high on the price. But yes, putting off replacing your brakes results in much costlier repairs.