Alter is 7th in their region, played 2 of the 6 teams ahead of them, and lost to both. The other
4 teams are Taft, Woodward, Tippecanoe, and Wyoming. After this Omnia Academy next game, they get a 2nd crack at CJ, and the rest is a pretty mediocre schedule. Now, if as you think, Alter is ranked too low, those other 4 teams will falter during the rest of their schedule and Alter will move up to their "rightful" place. Or they won't and maybe it is you that has them ranked wrong in your head because you rely too much on your feelings and gut.
The system takes their opponents' win percentages AND their opponents' opponents' win percentages into consideration. That means it's factoring strength of schedule. At the end of the day it sounds like you want teams getting credit for losses as well as wins. Good luck with that.