Mate the caliper pistons are 'seized' that's why the lever is hard but the brakes are crap.Seen it heaps.
Why? because when a bikes sits around the brake fluid turns to mud and crap gets behind the seals pressing then against the pistons and making them tight, they aren't really seized, just uber tight.
Cure ? Easy just get a new caliper seal kit, they are really cheap and as far as I know they fit Honda CR's 125/250/500 from '84 to '01 or later- same seals.
You don't even have to remove the brake hose, use the lever to pump out the pistons-clean the caliper (spotless) fit new seals, (lube seals after words) install clean pistons.
Hold the caliper above the master cylinder to let the air go up, put something like a block of wood between the pistons and caliper body, bleed in that position.
Refit the caliper and ride.
My just finished '87 CR500 resto.