Pencil Skirts: How Do They Work?

I bought my first high-waisted pencil skirt today. This is a funny area in the style/fit department for me: I think pencil skirts work with my body type but I'm not sure high-waisted does. However, this little number was too cute to resist. I figured it was worth bringing it home to analyze.

I have to admit, I think I'm a bit guilty here of picking the most flattering photo I took. Let's call the above the best-case scenario. For comparison, here's one that demonstrates my issues with the high-waist:

Generally, my issue is the fact that I'm short-waisted. That, and my rather large/low bust, means that a high waist only sits about two inches below an empire waist... which I just don't think is all that flattering. To my eyes, it tends to make me look more busty and less slim... which is sort of the opposite effect you'd want a pencil skirt to have, non?

Now, all that being said - I'm still not sure I bought this skirt in the right size. It's sitting a smidge above my natural waist and it's pretty snug... I can sit down, but barely. I'm wondering now if I perhaps should go back and try a larger size... it may sit better on my waist and give me a little more length, at the risk of becoming frumpy in the hips/thighs. Hmm.

Thoughts?