Never hurts to find a second way to double-check the temps. -and yes, what matters is what the temperature is inside the cage, on the floor with the substrate pushed
back, where your snake could make contact if it chose to. 86* there should be fine. You just want to make sure it's not over 90*, & 88* is probably safer.
Don't know what you're using for substrate but if it's dense, then yeah, you probably need less of it, at least over the UTH, so the t-stat doesn't need to be cranked up.