My experience is exactly the opposite. I rode for years with the bars four inches or so lower than the saddle, because that's what "they" said you should do. I was never completely comfortable. On the advice of a neighbor who's an orthopedic surgeon, I raised the bars so they're level with the saddle and instantly felt better.
From your description, you're getting shock through the seat tube directly to your back when you're upright. I may not feel that because I'm NOT upright--I still reach out to the bars, I just don't reach down to them..