Hmm.. my intake had a tube type thing that reaches down into the tank.. maybe yours is missing... if you want call marineland customer service.. they are excellent, very fast and efficient. They sent a bulb for mine for free since I got it open box sale from petsmart.
I would say mine is about two inches as well. I fill so the water just touches the black part of the tank.
It cant hurt to open the hood for a few hours a day... I am always doing something so the hood is off for a few min... between feeding etc.
BTW... do you have a hard time feeding? There doesnt seem to be a lot of room between the filter to feed through and my boy cant tell where its coming through so I have to take the hood off daily to feed.