The centre of the spool moves ##L## and rotates an angle ##\theta##. So the top of the spool moves further than the centre. A length ##l## of string that was wrapped around the spool has been payed out and is now horizontal.
Suppose you want to lift up a heavy plank, weight W, at its middle. The plank lies on two supports height H. You position a block, height H, at X from its midpoint. You go round to the other side and insert a rod under the midpoint of the plank to rest on the block. You hold the rod Y from the plank and lift distance L. The plank rises R.
Work done =WR
Lift force = FL, normal force from block =FB.
FL+FB=W
FLY=FBX
R/X=L/(X+Y)
Which leads to, work done by you = LFL=WR
You did all the work, the block did none.
Yet, both your lifting force and the normal force from the block feature in the net force on the plank.
You will just have to accept that a force that contributes to the net force does not necessarily do work.
No, as I wrote, the equations are fine. The sign you put on a force in an equation only has to match the convention you are adopting for which way is positive for that force. When you wrote -F in your force balance equation that just meant you were taking left to be positive for that force. When you later discover that F has a negative value that tells you that it acts to the right. There is no need to change any algebra.