I have fitted 26" wheels to my (supposedly 700c) cx/gravel/touring frame which will be my second mb build.
Yes, it lowered the axles; but I jacked up the front end by switching the 700c rigid fork for a 26" real suspension fork.
With a 4" travel fork that's about 3" after sag, but it's for the smaller wheel so it's about 2" longer than the original fork, so it raises the bottom bracket by about an inch, leaving
the BB the same height above the ground as before I changed the wheel size. Except now the tyres have more surface area for traction, and more air volume for riding over rough ground.
Determine the widest tyre width that will fit in the frame. Then choose the rim width that will work well with that tyre. For me that was a 2.2" Halo Twin Rail tyre on a 30mm (36mm external) wide Halo SAS rim.
A tyre should be between about 1.4 and 2.2 times the width of the rim. Being conservative here means not getting blow outs from the tyre bead failing to lock into the rim bead, and not having the tyre roll off the rim bead when the tyre is punctured and deflates quickly before you have any chance of stopping.
A Halo SAS rim is 30mm wide so it will be ideal with a 2.2". The very narrowest tyre that should be fitted is a 1.6" , and the widest a 2.6" but it will take a 3" knobby tyre because the knobs make up a lot of that 3"
On small tyres you can notice even very small differences in rim width easily.
I took the original wheels from the 700c cx/gravel/touring bike and used them on my first build, a 700c road MB.
It previously had 15mm (17mm external) width rims but they were a little too close to the limit with my 32mm tyres. I noticed a big difference with the way the tyre fits the rim now I have the 17mm (19mm external) rims. They're much happier.