Jeff, your sketch is correct. Did it provide any information to you? To me, I see that if you move the target up/down, and/or the bow up/down, the arrow CANNOT be parallel to the ground any more as indicated in your sketch. (I better list my obvious assumption since you seem very interested in picking nits today: you dont move 'each' the same distance one direction)

It is still parallel to the string when you let down (obviously) even if no longer parallel to the ground when you, say, move bow down 2 feet. What questions are you still struggling with? To me, by your sketch, you have a grasp of everything you have 'discussed'