" I find that I am uncomfortable with my arms dropping that far to the ground level. "
It is an entirely personal matter, of course, but IMHO (and a lot of people's) the "right" way to use an Xlite is as follows. Lie on it and reach over and open the valve a bit. Slowly let the air out until your hip (the lowest point that supports the most weight) is barely off the ground no matter how you turn, but never touches. Close valve. Vary as needed and to taste. If your hip is ever too cold - more air.
For example your butt will hit the ground when you sit up which turns out to be quite useful for more than one reason. Anyway I find this perfect for my tastes, and it even solves to a certain degree for me the perennial issue of finding a perfectly flat spot. Before this I have used torso-lenght CCF pads for a very long while and have spent over a decade lying down on prospective campsites first (not so good when it is raining or already wet) to test if there is some unseen slope that will bother me. I haven't tried this yet to my knowledge, but I imagine you could get a level sleep even on very angled ground, within reason. So that problem solved as well. I just eyeball the flatness of the campsite now.
So back to the main issue that was mentioned, yes, if the thing is as tight as a trampoline and you are on your back you elbows are going to be kind of low. Though I am a side sleeper I noticed this as well when lying on my back with it fully inflated. With the cushy inflation, for me at least, not at all. In fact I will go further than that. During one of the past few time I used an Xlite this way I decided that it could turn me into a back sleeper. For me lying on my back in the semi-deflated mode with my elbows on the side is some kind of paradise, and the elbow drop then become perfect. I started with a small, and still use it if it will be very warm, but since I am currently using a very boney pack I decided to see what giving my knees and feet a break after all these years would be like. So I cut a regular Xlite down (highly recommended if you are short btw, and only takes a few minutes to do the mod), and with my heels just curving over the end, OMG it is the most comfortable thing I have ever laid on, including my bed. Waves of pleasure sweep over me and the decades of using a pad as a minimalist exercise in necessary evils seem redeemed. I mean I even tried a freakin' "Van Peski" hip donut a few times for pity's sake. Ah, redemption at last!
I also find for myself that the deflated mode also completely solves for me the rolling off the edge issue - if become more of a cradle. I'm not huge, so a lot of folks might still need the 25 inch one, even deflated. It also complexity solves the leg drop issue for the small. So if you like the semi-inflated mode everything is rosy.
Now on the occasion where it is cold enough to need it, you can use a bit more air, right up to fully inflated if you are in the arctic (hyperbole warning).
I do know there are a few folks who don't like it deflated and need it to be a trampoline. Sucks to be you I guess if your elbows are an issue. Otherwise, do try it at least once before you give up on the xlite.