the terms Report and Document are often used interchangably, but for clarity, a Webi Document can contain one or more Reports. Each tab in a Webi Document is a Report.
I'm not sure why you're not seeing any reports in the "Report Directory 1/2" folders when using REST calls if you are able to see them in BI Launchpad when logged in as the same user.
When logged in as the 'general user' are you able to return any results with the following call?
GET /biprws/infostore/5904/children
this should list all objects that you have rights to in that folder.
If you go into BI Launchpad (logged in as the 'general user' and create or copy a webi document in that folder, will it finally be returned using the /raylight/v1/document?limit=50 call? (you could give it a name like "123ABC" so it should return first in the list alphabetically.