I think I might be able to shed a little light on the National Judges' Cup meet. Our oldest daughter went, as a level 7, when it was in Houston. And....until she competed in the level 9 regionals and Western nationals, it was by far the most competitive meet she'd ever participated in.
There's a National Judges' Association, to which the various state judges' associations belong. If they decide to participate, each state has a qualifying meet. At this meet, the top six level 7s (regardless of age level) are chosen to represent that state at the national meet (California sends 12--a South team and a North team) Many potential level 8s, and even potential level 9s, will stay at level 7 to try to qualify for this meet, and will then go ahead and move up immediately thereafter. The state associations then pay some or all of the travel expenses, and the girls go to the national meet, where they compete both as a state team and as individuals.
When our daughter went, there were probably 20-25 states represented. I don't know why all states don't participate. Maybe it somewhat depends on where the national meet is going to be? (It was in Houston two years ago, Indianapolis last year, San Diego this year.) Anyway, just seeing the top gymnasts from Texas and California alone was an eye-opening experience, to say the least.
Now, at the same time this national meet is happening, there's a 2nd meet running simultaneously. And, I think this meet was mainly just a normal meet, attended mostly by local teams (with a few more distant gyms in attendance, too).
Hope this helps.