Is it incorrect to say that "passenger jets like to cruise at higher altitudes because there's less drag"?
There's less drag at the same speed (and other things being equal, aside from altitude).
This is due to lower air density at higher altitude, which linearly affects drag. But just the same, it affects lift! You get less drag, but less lift too. If you want to fly level, you can't afford that: lift must be equal weight.
So what do you do to restore lift? You either fly faster, or increase angle of attack (AoA), or both. Either way, drag will roughly be the same.
Flying faster with the same drag is the benefit. However, sooner or later you'll hit the speed limit. (Most commonly for jets, this will be the Mach limit). From then on, you can only increase AoA.
Changing the AoA affects the L/D ratio. It may increase or decrease, depending on how the wing was designed. There is a certain AoA which will be the 'best'. If the jet was optimised for cruise, it will fly close to that angle.
Does it make any sense to fly even higher, where you have to increase AoA past the best L/D angle? It might, but not much. Primarily because you might squeeze a little better fuel consumption in colder air (that SFC component), so the optimum may be slightly higher. But flying at a higher-than-optimal AoA may be unstable by speed. (Which is manageable, but is another difficulty you don't want).
At some point, you will exhaust either the AoA, getting dangerously close to stall (while, remember, being at the speed limit at the same time - the so called 'coffin corner'), or thrust: it will keep reducing in thinner air, until it becomes lower than drag. That's your ceiling.