but this time only including the 10% (or whatever) share of the interest that corresponds to the cash-out money I used for primary residence improvements?
Sounds to me like you got it.
every year, as I spend more money on improvements (new A/C, shed revamp, etc.) I may increase the % to match my cumulative use of the cash-out money towards primary home improvements?
Yes. Just keep in mind that the tracing rules apply on the flow of the money.
