Yes, I do assume that water remains roughly level, with exceptions for tide (negligible on the Great Lakes), wind or storm surges which can only affect fairly large areas at any particular point in time due to the fact that water remains roughly level, and waves, which were also negligible that day. The waves were fairly consistent through out the boat trip on a clear day, so yes, I am also assuming there were no giant waves between the boat and Chicago at any point during their short trip across the lake. In addition, any wind caused surge of water would have lifted the boat up higher which would have given them an easier time seeing more of the skyline than normal. If you truly think that a wind caused surge was high enough and somehow magically localized enough to hide the skyline, you would still need to explain why there was not large scale flooding as a result...unless the wind somehow created a giant hill of water in the middle of the lake....which is ridiculous. With average wave heights of 1-2 feet during their entire trip, and little or no apparent whitecaps, I would guess that the wind speed was under 15 mph for the entire trip, which again is not enough to cause much of a surge.
Please explain what atmospheric conditions would hide the lower 3/4 of a building 40 miles away, but allow the top 1/4 to remain visible. The building is not that high that there would be a significant difference in the amount of atmosphere between the viewer and the bottom of the building versus the amount of atmosphere between the viewer and the top of the building, so any atmospheric effects would be equivalent for all parts of the building. Remember, both top and bottom of the buildings are 42.6 miles away at the time the most distant image was recorded, so the amount of atmosphere involved is almost completely equivalent.