That was a good movie. I watched it several times, partly just to see all of the old cars.
Getting back to legal or illegal...there is no easy "yes" or "no". Applying for the permit you linked is free, but I'm not sure what going through the process. One would think that doing it for personal use should be free, but apparently so many people have gone blind or died from batches gone wrong that "They" feel the need to regulate it.
Ahh, but there is a real easy yes or no... the answer is no, unless you get a permit, or use someone else's facility that has a permit to distill.
And I agree that you should be able to do it for personal use, but as you mentioned, there's the whole health issue. Lead solder in a still can add poisons, for example, so equipment regulation would be an issue.
From what I understand , once you start the run in the still, the first part that comes out of the still, the heads, contains low boiling point alcohol and other compounds that are not good for you. Once those boil off, the good alcohol, the hearts, comes out. After that, you get the tails, which has oils and very little alcohol. You don't want to drink the heads. I hear it makes good paint thinner.
So knowing when to make those cuts between heads, hearts, and tails is important not only for safety, but for taste of the final product. Anyway, and again, from what I understand, it would take quite a bit of experimenting with your mash recipe, fermentation times, fermentation temperatures, still heat, etc. to come out with a tasty 80 proof whisky from a single run still that your grandpa might have left you. Or so I've heard.