Yeah, the seedlings should be as close to the lights as they can be without getting hotter than 90'F. Be careful they stay moist too, usually I keep seedlings pretty moist until they are about pencil eraser sized.

Ok, I moved them a bit closer. The only problem now is that the trays are overlapping the coverage of the T5 hood. The hood isn't wide enough, so the ends of the trays stay moist while the center dries out.

Also, some of the seedlings are now about pencil eraser size, but are much thicker on top than they are where the cacti meet the soil. Do the bases thicken up as well, or will I just have to plant these deeper when I transplant the seedlings?