Yes the pots to big so it stays wet to long. And its planted way to far down in the pot. There shoukd onmy be .5-1" of room at the top for a pot that size.
Terracotta is great. You shouldn't have a problem painting it, however, the paint may have a problem as the clay will absorb the extra water. Make sure the paint drys very well and then glaze it. Do not paint the inside
Also, Only water when soil is completely dry. Succulents hold/retain water (that's why they're so easy to take care of), so you can wait till soil is totally dry before watering them:)
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