I was born and raised in a South American country and we also have parrots but living with wild parrots doesn't mean people know about the correct husbandry. My grandmother and I used to raise baby parrots (they also used to take them from the nests back home and sell them at the farmers markets) and we fed them white bread 'miga' with milk - a TERRIBLE diet for a baby parrot! And the only reason why they survived is that these were babies taken from the wild -which I am sure was the reason your grandmother's parrot survived (but not thrived) on the diet you mention. In the wild, there is natural selection so only the strongest and healthiest animals reproduce but this doesn't happen in captivity and what we now have are very poor and weak specimens of parrots because they are the offspring of weak birds that are the offspring of weak birds that are the offspring of weak birds that are the offspring of weak birds and so on and so forth. Breeders used to use only wild-caught parrots as breeders because they realized very soon that they were the only ones that they could count on to reliably produce good babies and remain fertile for a good number of years. But that all changed back in 1992 when it became illegal to import them so nowadays, there are hardly any wildcaughts still breeding and the ones left are the largest species and none of the little ones because they all died off.
And, yes, I am sure that putting your hand in the cage was something that was recommended to you as a good method to tame a bird. We used to use that method (and other bad ones -like clipping, toweling and forcing the bird to accept our touch, putting them in a dark, small room, making them hungry and only offering food out of our hands, etc) ourselves years ago but have learned since then that none of them are any good in the long run because a parrot would only trust you if he comes to the realization that you are good on its own and not through forced inurement, the basis of flooding techniques (behaviorists warn you about not using flooding techniques and no trainer uses them any longer, read Michael's writings and you will see for yourself).
The first thing you need to learn when you deal with parrots is that, if you want the parrot to trust and love you (which is the ONLY way you can have a good relationship with them), you need to respect their wishes and that flooding brings short term results but not long term. Methods and techniques change as we learn more and more everyday. When I was a young girl (and even not that long ago), people used to rub a puppy's nose in his urine and spank him to teach him to go outside but nobody does that anymore because we learned that it doesn't work. Same thing when I went to school, the nuns would hit our fingers with a ruler if they saw us biting our nails but nobody does that anymore because it doesn't work. And I can go on and on about methods that were used for years that we now know were not effective. Parrots are smart animals which can make deductions on their own (they can count and even understand the concept of zero, they measure time both past and future, they can figure out how to open locks even when three and four steps in order are needed, etc). And they are very forgiving but they also have very long memories. And they can be sneaky and stubborn, too. So I suggest you start doing some good research on current behavioral modification techniques because what we used to do 50 years ago is now obsolete - and for good reason!