................ Coming from a 5 speed manual, I tend to drive in 4th on the 35 mph streets. All the while the up arrow indicating I should be in 5th. ..............
Our manual is a six speed, but they didn't add another gear beyond five as one may assume, but instead, they added a gear below first to make a sixth. So the final ratio between the old five and the new six are going to be the same/close.
Observed the same behavior with the shift light on my prior vehicle. Automatic trans vehicles often teeter back and forth between OverDrive and Drive under the same conditions. While the ECU does have the ability to calculate current engine load, it doesn't have terrain data.
As long as the engine has been running for a time and is sufficiently "warmed up", will have no problem being in sixth at 50mph on steep hill. I'm usually in sixth when cruising around 40mph, unless the engine is "cold" or it's on a steep hill.
Use your ear and engine vibration to determine what is and isn't "lugging" or is unacceptable. There is typically a notably stronger engine vibration with high load on a cold engine, versus warm one. The intake/exhaust note is also a little different. So I will change my shifting accordingly.
We're in a valley so grading can change pretty quickly. In addition there are drivers that don't compensate for minor changes in terrain... and so drift up and down in speed, resulting with a constant and annoying back-and-forth shifting.