Pickling onions are the size of a golf ball and are different to pearl onions which are the size of a medium marble or cherry. Pearl onions are used to make cocktail onions, whereas you need the larger pickling onion to make the English pickled onion.
Going from my distant childhood memories, mum used to toss the peeled pickling onions through cooking salt and leave in the bowl (complete with the salt - and be generous) covered with a tea towel for quite sometime. Then she would rinse the onions and bottle in malt brown vinegar with peppercorns (although they may have been whole cloves or a combination of both). Would leave for a while (days? weeks?) before eating. Pretty sure that was all there was to it but I may have missed something.
Will try to find mum's recipe - if she wrote it down, which is a big "if" - and will post again if I find it.
Rob, in a true English version, you wouldn't need to add the caramel colouring as the malt brown vinegar colours the onions. maybe you should try using that instead of whatever vinegar you are currently using. Just a suggestion.
Here is Mrs Beeton's version: