I usually re-read whatever I wrote last time and find myself adding in bits, or chopping out parts. Once the first draft is done, I generally leave the whole thing alone for a week or so, then start going through chapter by chapter, again adding things and cutting other things.

I also have an online critique partner and a "real life" writers' group and they tend to catch anything I miss, like typos or gaping plot holes, lol.

And yeah, I totally get it about re-reading and getting emotionally involved. While I'm actually writing, I tend to forget a lot of what's previously happened, so when I re-read I'm always really caught up in it all.