Do you have the stock rudder? That one projects about 1-2" below the transom when folded up. With correct fore/aft balance, the lowest point of your boat should be forward of the transom, so that that additional 1-2" in the back really ought not to be the lowest point.
Normally, based on the painted waterline, the transom is intended to be immersed to a depth of 1-2". That means, the stock rudder would maximally come to 4", not 7". If you sit all the way in the back, and have a heavy motor strapped to the transom, your boat will squat, and the rudder may indeed become the lowest point.
That said, some people here have modified their rudders so that they both tilt beyond 90 degrees and have a pivot point that sits higher than the original design (the latter means the rudder can't be used for racing, just in case you care).
Here's one design
viewtopic.php?f=11&t=4956Additional threads can be found with a search like "site:forum.daysailer.org/forum rudder head" (use a search engine, not the search inside the forum).