The cruise level is the max practicable height you can reach and maintain in your flight, directly dependent on airplane (max ceiling), its load (both fuel and passengers) and on the traffic (though this last is usually a concern of Real Aviation and not simulated one, unless flying online) and, on short hauls, of climb time.
Example: a 744 has a max certified ceiling of 41.000 feet. Though you'll never be able to reach that high at max payload and fuel. On a long haul, you usually do a step climb. As in your first flight level will be a low one (depending on overall weight, even so low as FL 280 to start) and as you burn fuel you will climb higher up to (if you think it necessary up to max ceiling).
On shorter hauls (ie, less than 400nm) better declare a max cruise level following the old rule nm/FL (ie, flight distance 240nm == FL240 -- flight distance 140nm == FL 140/14.000 feet).
At least this is how I do it.

There's but one real cure for human stupidity. It's called DEATH.
At the moment mourning the assassination of sarcasm and irony for the good of the "higher".
Proud FSIX user. Active user of FS98, X-plane and novic