I've read about soil separating from sides of container due to underwatering or waiting too long to water. When I find this happening to my plants that are in small (3 to 6") nursery containers, the soil is moist everywhere except the very edges all along the container. (I use the wooden dowel method to determine moistness of soil).

Am I underwatering these plants?

Is this condition drying up finer roots?

Is it happening because the container has too little soil? I notice that small amounts of soil washes through the drain holes when I water. I am wondering whether supplemental soil should be replaced on top or bottom of the container. Also whether I can use paper towel instead of wire mesh to prevent the erosion, without worrying about root rot?

Thank you.

zone 6b, PA.