Hamlet is referring to notions about the body that were widely held at the time. According to the theory of bodily humours, different organs were believed to produce substances that influenced personality and behavior. The liver was thought to produce blood, and blood could make a man cheerful, optomistic, and full of life. Too much blood, though, made him headstrong and incautious; too little blood made him meek and passive. The metaphor "pidgeon-livered" describes someone whose liver is so under-sized, that he has the timidity of a pidgeon, i.e., he's faint hearted.
It was thought that gall, or yellow bile, was produced by the spleen. People associated an excess of gall with those who were violent, vengeful, and ambitious. When Hamlet says he "lacks the gall to make oppression bitter" he means that he doesn't have what it takes to take revenge on Claudius. "To make oppression bitter" refers to turning the tables on a oppressor, who, once overwhelmed, faces the bitterness of defeat.
"John-a-dreams" is more or less a slang phrase, popular in Shakespeare's day, that describes someone who day-dreams rather than takes action."
So you're right. Hamlet is being hard on himself.

