You should look up how the tournaments were organized back then, you can't compare to things today.
In many Libertadores editions in the 1960s countries only had one spot. In some years Brazil as a whole was denied a spot: 1966, 69 and 70 Libertadores didn't have any Brazilian teams whatsoever (and in both 1966 and 69 Santos would have played).
Even the national championship wasn't "national", as there was only one spot per state, so states with great teams (like the state of São Paulo) would only have one team competing (either Santos or Palmeiras back then).
So Santos only had the chance to play in 4 Libertadores, out of 7 that Brazil was allowed, and won 2. That's a pretty good record. If there were as many spots as there is in UEFA Champions League today history might've been very different. Santos might've won more, or none.
If you applied the same standard to Real Madrid today you'd have a different outlook, as they were only Spanish champions 3 times in that period, so mainly ineligible for most of the CLs they won, and only once were they the Spanish champions before a CL win.
What about Messi's Barcelona? And Manchester City in the past 5 years, by your estimation, could not be considered better than their opposition due to having won no Champions League? I think your standards fail the smell test, but more importantly it is anachronical to suggest the Libertadores was the foremost soccer tourney at the time.
I don't really think comparing across eras is a good thing, but to your last point about CL organization - Madrid did win the first 5 CLs when they were organized in a manner that allowed only the champions from each country to enter.
In many Libertadores editions in the 1960s countries only had one spot. In some years Brazil as a whole was denied a spot: 1966, 69 and 70 Libertadores didn't have any Brazilian teams whatsoever (and in both 1966 and 69 Santos would have played).
Even the national championship wasn't "national", as there was only one spot per state, so states with great teams (like the state of São Paulo) would only have one team competing (either Santos or Palmeiras back then).
So Santos only had the chance to play in 4 Libertadores, out of 7 that Brazil was allowed, and won 2. That's a pretty good record. If there were as many spots as there is in UEFA Champions League today history might've been very different. Santos might've won more, or none.
If you applied the same standard to Real Madrid today you'd have a different outlook, as they were only Spanish champions 3 times in that period, so mainly ineligible for most of the CLs they won, and only once were they the Spanish champions before a CL win.