This proposal sounds very good, balance-wise. I can see you took my concerns into consideration. I do see some impracticality/logic holes here or there, which I'm going to address, but I think the idea itself is a great solution.
As of now, it's technically possible for gods to make an infinite number of badges. That's all well and good when badges don't actually serve a purpose, but when they do, the system should be kept both simple and sane. A maximum of 2 badges per reality seems fair.
Secondly, not all of the godly endeavors are either possible or appropriate for "rift" realities. For the sake of simplicity, I would recommend keeping the godly endeavors as they are, and making a separate set of criteria for the creation of Rift realities.
I get what you’re talking about with “personal rifts,” but the phrase’s meaning wasn’t immediately obvious. In this case, I think it would make more sense to describe things in plain language.
"All badges" is liable to be an ever-increasing restriction. It might make more sense to have a fixed, feasible number of badges act as the entry requirement, but provide some sort of mobility advantage to players who have taken the time to gather more. Maybe they could go farther into the Rift, or stay there longer.
So, all in all, I'm definitely liking the proposal, but it seems like it might benefit from a bit of revision or clarification here and there.
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I'll type up my thoughts on the storyline/goal when I've had a good night's rest. That'll probably come with more suggestions than constructive* criticism, for once.
*While we're on that train of thought, I'll take the opportunity to say that I want all my input to be helpful in some way. If you think I'm nitpicking, I'd very much appreciate your telling me so.