definitely hang the cabinets lower. 16" should be fine. We hung our cabinets 18", and I wish we would have lowered them to 16 to make it easier to reach because I am short.

I agree with Squigs in general -- but do check the height of your countertop appliances before deciding firmly. Some coffee makers or stand mixers can be tall...

You may also want to put crown molding on the top of your cabinets that ties into your wall molding.

The rule of thumb is 18" from counter to bottom of upper cabs and you don't include the light rail in measuring that 18" distance. The light rail is just trim in order to, well, hide the undercab lights. You should maintain your original distance of 18" from the counter to the cabinets. The light rail is just trim, and should not be included in your counter-to-cabs distance calculation. So for example, if your light rail is 2" high, your distance from counter to cabs would be 18", and your distance from counter to bottom of light rail would be 16". Also, I am assuming you will be having undercab lights. If you were to go shorter than 18", the undercab lights would be hung too low. And as Sweeby said, you want to have room for coffee maker, etc.