Also by putting the top of soil so below the top of cup you are creating a more humid and independent "atmosphere" of sorts in the cup itself. The cups rh and temp will differ from your other plants in your grow room.
I under filled the cups of my first grow. After watering them the soil sank lower than I had anticipated. I just pulled them out of the cups and added some soil to the bottom and sides. Worked like a charm with no I'll effects. The seedlings are young and haven't spread out there roots yet so I had no transplant shock. Make sure your drainage holes are at the lowest point of the solo cups too..