The Past Perfect expresses the idea that something occurred before another action in the past. It can also show that something happened before a specific time in the past.
Emma had never seen an R-rated movie until she was 16.
In the above, the past perfect refers to something that happened before something else in the past.
Many progressives, who thought well of Wilson's dream of a new world order, drew back in revulsion when the terms of the treaty were published.
Your example doesn't describe such a scenario. It doesn't say that the progressives changed their way of thinking; it only says that they drew back in revulsion at the terms of the treaty. The who thought well of Wilson's dream of a new world order, describes the progressives. It seems to me to be akin to:
The progressives, who were liberally inclined, were horrified by the terms of the treaty.