Way too cold. Go to thinner material and up your voltage.
No you will not get full penetration on 1/4" with a 120 amp unit. You won't even get good penetration welding both sides of a 1/4" piece with a machine that small. The problem is one of mass. The 1/4" will suck up too much energy so your fusion into the base material will be poor. The weld material will simply just sit on top and not bond well to the base material. You'd be maxing out a 180 amp mig to be getting decent penetration on 1/4" and even then with but joints you'd need a good bevel and decent prop to get good welds. A 200 + amp class mig would be a better choice for a steady diet of 1/4".
With only 120 amps max to work with and a short duty cycle, 1/8" would be pushing that machine. You shouldn't have issues with penetration on 14 ga. Small 110v machines are sheet metal units. The problem is lack of input power.
One other issue you have is poor prep. Don't try to weld over paint and rust, especially if you are under powered to begin with. You need to grind down top shiny steel. A power wire brush won't cut it as all it does is polish the rust, not remove it. Granted if you have enough amps you can weld thru some rust and scale, but it's a bad habit to get into. All those contaminants will give you a poor weld.