I think they do? I'm not sure how far 'down' but they apparently spawn within the area, except 95% less likely in uncovered spaces; but I'm not clear about the area that happens within.
It might be because Guardians tend to drop to the sea-bed when in neutral, you can certainly sometimes see some amongst the pillars, but they swam there from spawning elsewhere, they didnt actually spawn there ...
The spawn height is from sea level (I believe) to the floor of the monument (not including the support pillars, if it has any). Something like 58x58x23, but you need to check the monument floor level.
This thread may interest you, it was where a thread by Lotus49, CM, myself and a few others talked about farm designs. Both mine and CM's have two modes where either the guardian burn to death on hoppers or water flows are sent over the hoppers to a second kill area where the weakened guardians are manually despatched with instant damage potions.
I have two monuments drained, one is a farm, the other waiting for some idea I like. No problems with glass on the walls. Just remember if you make a farm, no glass on the roof, farm must be undercover for max spawns.