Level bug is common, i've seen many team with 1x, 2x level but started playing only weeks before me.
Take this as an example, but dont worry, their level is nothing more than a digital number, all other factors are the same as yours.
Lv 7 vs Lv 10 Cup, I faced this too, last season my team (lv5) usually had to fight with lv 7-8 team. Because we train our players too much, our top 14 players have high rating, so you end up with +1, +2 level teams, and if there is a manager who uses sell-away strategy, his level will be +3 than your. This happens.
You may find it hard to win the tittles (league, Cup, CL) because in your server there are many good managers, you can't do anything about this. I have learned that from million of Top 11 players on the world, we are devided to many servers and stuck in this server till the rest of our life. So if you're ultra unlucky, your server is filled with time-spenders or money-spenders.