Delay relay to control water level
You are correct that a dead-band is needed to prevent the pump from constantly cycling on and off when it is near the set point. That is why these systems use a high and low float or sensor.

It seems like you are making this way too difficult by timing the pump off instead of using a second float.

A fill pump controller like this would do what you want. 

Most tank level control systems use something like this, not a timed system.

Good luck!