Observe that the shop head is not perfectly cylindrical, but a bit bulged. There's a sweet spot where the rivet gauge will just fit over the top of the shop head, but won't slip all the way down. That's the point where I say it's a good rivet. My rules of thumb: If the gauge slips over with room to wiggle, drive it more. If it fits perfectly, that's barely under-driven but OK. If it almost catches the top of the head but not quite, that's barely overdriven but OK. If it won't go at all, it's overdone, replace it.
Mostly I use the gauge to calibrate my eye. Once you check a few and get a rhythm going you'll be able to see that a rivet is right just by looking at it. Use the gauge every so often to keep yourself honest.