A too short or high stem is likely to create too much of a weight bias toward the back. It can also create too much pressure on your hands, arms, and shoulders. Ideally your weight will be supported by your core spinal musculature and not your arms. Your arms should rest lightly on the bars without carrying much weight at all. The center of gravity changes depending on how aggressive your posture is and a lower center of gravity is generally desirable on a bike. If you think of the bottom bracket as a pivot point then an aggressive racing posture is rotated forward and down with the saddle much higher than the bars and with short 60mm saddle setback. A lazy sight-seeing posture set up is rotated backward with the bars relatively high and saddle lower moved backward with perhaps 80mm setback. People often mistakenly presume that a lazy sight-seeing posture is more comfortable but depending on a riders age, proportions, weight, and strength that isn't necessarily true. Typically noobs will start with the lazy posture and as their strength improves move forward and down. Professional racers typically have their bars about as low as they can get them and the longest stem available.

If you stand balanced on the pedals while coasting along on a flat road in a fairly aggressive posture hovering just over the saddle with all of your weight supported by your legs and spine with hardly any weight on your hands then you can sort of determine where your hands/bar and saddle setback naturally need to be relative to your body parts. For example you can remove one hand from the bars and imagine the ideal spot to rest it. You can briefly set your arse on the saddle and determine if it's too far forward or back.

Your wrists should be straight not bent and so you rotate the bars to achieve that. The position of your hoods relative to the bar top is unimportant unless they're so low you slip off them.