OP's solution seems like the way to go to me, specially for altitude, slight bonuses would be nice. I would remove the backstab mechanich because of how it interacts with attacks of oportunity: you are allowed to move around enemies because in paper that's supposed to mimic combat movement, and you are punished if you get away. Using this movement to gain advantages without any cost makes it kind of stupid when every character would move to backstab, then have their enemy backstab them in return and so on until one of them dies.
I think height bonus/penalties should only apply to ranged WEAPONS and not spells, that would have them feel different and convey different feelings on both styles of gameplay (ranged weapons as a more mundane but strategic gameplay and magic bypassing the laws of nature)
