Mike,you are not wrong!
QNH(variable) is the pressure set to give an altimeter height above Sea Level.
Flight Levels are ALWAYS flown with an altimeter setting of 1013.2 mb.
As you pass the transition height,you change from QNH to 1013.2 and from that point you are flying 'Flight Levels'.
You may even transition from QFE(height above the GROUND) to 1013.2 or Flight Levels.