Backstory and The Ghost

Not all backstory is created equal. It is something I have muttered under my breath many times at a variety of workshops, particularly those which have you quickly create two characters. Simply filling out a generic character worksheet will not necessarily help you get to the heart of the problem for the character. You can risk creating a Frankenstien character. Equally doing character interviews etc, do not always work. Characters can be good at hiding what is important.
What you are trying to find out is not the backstory that gives the character shape but the emotional would which propels the character through the story. Iglesias uses the term -- The Ghost. And that emotional wound is definately the Elephant in the Room which your protagonist is going to use all sort of lengths to avoid. It can take time to tease it out. I have been known to do extensive revisions because I incorrectly identified the emotional wound.
Iglesias use Rick from Casablanca as an example. The ghost from his past which is driving him is Ilse and in particular her abandonment of him at the Paris railway station. It could make you ask -- did he have abandonment issues long before? Why does he leap to the conclusion that she has callously rejected him, rather than going and seeking her out after he gets her note? But I digress here.
The other aspects of Rick's backstory -- American, former gun runner, bar owner etc do not drive the story in the same way that his former relationship with Ilse drives that story.
In order to grow and change, Rick needs to lay that Ghost to rest. Otherwise he is doomed to failure.

The thing you always need to remember is that if your protagonist could successfully accomplish the climatic scene in your story at the very beginning, you do not have a character arc and therefore you don't have a character driven story.
You also need to make sure it is the correct emotional wound. Pick the wrong emotional wound and your story goes off in a totally unexpected direction. The emotional wound must be directly related to the theme of the story.
You also need to decide IF you have a protagonist or co-protagonists. It makes a difference to the way you develop the character arcs.

Having devoured Writing for Emotional Impact, I am now devouring Dara Mark's Inside Story --The Power of Transformation. The books are highly complimentary. One deals with getting the emotion on the page. The other deals with structure and understanding how the character arc must effect that structure.  I will deal with some of my insights later. Basically all this is confirming what I had thought about my  R'ed ms and is showing me how to fix it.
I am doing something slightly different this time and will see if it works. Often I find it is great to discuss theory or pick apart movies/books to find the turning points to suit various methods, but it is another thing ENTIRELY to actually write a manuscript. It is all about mastering craft.