1 - If I understand well, yeah, the better 14 players are used to see the promide of Quality, others don't count. Too we have to count that cones not added count as added.

2- No. The cup level = to the level of the better team that participes in the cup.

The cups are done, taking into accouint the Q., so, the 128 teams with more quality of your server, do the 1st Cup called "Shark Cup", then the next 128 better, do the 2nd cup, the next 128 do the 3rd, and continue till all cups are done. the Level of the cup and the prizes u will win will depend of, the level of the better team that participes, as Ive said.
For example I played the whole last year in cups of +3-4-5 levels. The +5 levels teams, are low Quality teams of +5 levels than me, and play with me because doing the list better Q to worst thats the order, they are next me in Q terms so, despit +5 levels the Q. is aprox mine, so I face them.

Hope I expleined.
I dont like the system, that's another thing I always complain. I only have 1 cup that is in ma signature. LOL