Yeah the cutting depth is the thickness of the stock. I add a bit to sand off later. You can always cut something smaller but if you cut too short you can't fix it. I have a big pile of mistake pieces and each one annoyed me immensely. 
Here is a wine box I made for a gift recently and you can see the box joints. It looks like you will be using a router with your jig but I used a table saw but it is the same thing.

Here is a wine box I made for a gift recently and you can see the box joints. It looks like you will be using a router with your jig but I used a table saw but it is the same thing.
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