Think of the image coming out of the back of the lens spreading out like the beam of a flash light, the further away from the wall it's shining on the larger the circle of illumination. Now if you mark out a rectangle on that wall as you move away the less percentage of that circle covers that rectangle, essentially cropping out a progressively smaller portion of it. You can keep adding extensions until you use up the lens' resolution.
I'm really surprised you got 3.5:1 out of that setup, I would've expected a fair bit more. My setup gets that with half the extension and focal length, my lens must have a much shorter focussing distance than the MFD on that 100mm.
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