yeah, DT level is determined by the overflow weir and independent of the sump water level.
I think you meant the overflow water level changed, not the DT water level. and that is correct. If you are using a DC pump, you can just dial up the dc pump.
the baffle could be higher, but there is no reason why it cannot be made to work at 5". and you may need to tweak your herbie drain a little (or dc pump adjustment).
if you run the sump water level at 10" on a 5" baffle, make sure you can keep the water level constant with ATO/float switch. Assuming you can keep the water level constant, the only possible issue of not fixing the baffle is micro bubbles from the skimmer going into the return pump section.
I think 8" or 9" water level should be right for that sump height (whether you fix the baffle or not), and works for most skimmers.