The adjustment is really not higher or lower as to the height or length of the rear shock but about how soft or stiff they are. The only way to lower the rear end is to replace the shocks with shorter shocks. But be careful doing that since you don't want to bottom out the rear wheel in the wheel well.
Having said that, I really don't recall which is a softer or stiffer setting between 1 to 5. I set mine when I bought the bike and didn't think about it since. I THINK 1 was the softest setting since that's what it was when I bought the bike but can't be sure. I always left it set to 3 for me riding solo.