Hi Brian, your handle is kind of just skimming along the outer edge of your cup body, it isn't sticking all the way through it.

Zooming in on this area:



You can see that there is some space between the handle and the body:



Zoom in to that area and then drag the handle over a little bit so that it is sticking through there a little bit, best is so that it is about half-way through the wall of the body, like this:



After that the boolean should work fine, and then a fillet will work up to about a max of 0.45 radius:



Let me know if you have any more problems with it!

- Michael