As you approach the speed of sound you get all sorts of undesireable effects (shockwaves, mach tuch etc). Airflow is not constant over all parts of the a/c so when you have an indicated mach no. of ,say, 0.8 parts of the ac will be experiencing speeds approaching mach 1 (almost certainly the wings as the shape is designed to speed up airflow).
This will therefore limit the forward speed (without designing it to be supersonic) and you generally cruise at this airframe limiting factor at higher levels.
As you increse alt at a constant mach no your IAS will reduce - ie at FL370 you may find that your mach limit of 0.8 only gives you 250kts, while at FL280 you might manage over 300kts at the same mach number.
This leads to a pay off between fuel burn and speed - the higher you are the less fuel you burn for a given time. However, at lower levels you are travelling faster at a higher burn rate for less time - possibly burning less fuel! So your optimum Flight Level depends on the weather of the day and you will find people requesting different levels to those flight planned (if it is quiet).
The short answer to your last question is that it is accurate to use either it is just of more use to those you mentioned at the time to use mach. (It would also be of little use for a small ac to use mach no as they ARE usually more worried about their speed relative to the ground say for time and distance nav. also at the levels they are flying at IAS will always be more limiting to their airframe than the v. low mach number)