PA,
the GPS waypoints are in reference to the WGS84 ellipsoid, which is a gross simplification of the shape of the earth. For most practical purposes, you need to use the geoid which defines MSL. The geoid is a lot bumpier.
In practise, this means many things (as we have seen). One of them is that the distance between 45N 37E and 45N 38E, as travelled at sea level, may not be the same as the distance between 45N 40E and 45N 41E.
There are many difficulties with modern navigation, and I'd say sevaral are more intricate than the position solution. Position accuracy and positioning availability would be two tricky ones off the top of my head in the modern day of GNSS.