Are they any known negative side effects to overfilling?
Since the transmission will just chuck any extra oil through the vent, the only negative side effects would be that you might get some transmission fluid dripping on your garage floor after the first time you take it for a drive. And you might get some fluid spilling and being flung around by your driveshaft, but really not enough to worry about. In fact, in your case (just shy of 2 quarts) you won't have any fluid being chucked. It should all stay in there.
How much should you overfill?
You did about right. I think you could have gotten a little more in there, but it's nothing to quibble about.
When flushing my car was straight.
That is correct.
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