Let me start by saying that the notion of a "sweet spot" is just a subjective impression that I (and many others before me, e.g., Lydiard) have formed. It's therefore difficult to pin things down with exact numbers, and the chart to which you linked is really just my attempt to conceptually relate the idea to the training levels (instead of, say, VO2max). IOW, don't take it too literally (esp. since that's somebody else's modification of my original - rather lame! - "artist's rendering".)
Having said all of the above, I do believe that there tends to be a "sweet spot" with respect to training intensity, which if push came-to-shove I'd say lies between the level 2/level 3 border and functional threshold power (i.e., between 76 and 100% of functional threshold power). Below the lower end of that range, the training stimulus simply isn't as great, whereas above the upper end of that range, either you simply can't do as much total work or the nature of the adaptations themselves begin to change. In between lies a bit of a "sweet spot", in which the combination of volume and intensity appears to be maximized, leading to the greatest adaptation.
So to directly answer your question: no, I don't believe that you should
necessarily be training at 85-95% vs. 100% of functional threshold power. However, I do believe that,
in general, you're better off not pushing
too much above 100%, as that may excessively limit the total amount of training that you can do, and thus the overall benefit obtained.
Final caveat: no matter how much "sweet spot" training you do, at some point you will end up bumping up against your own personal ceiling with respect to how high you can raise your functional threshold power (right, Rick?
). At that point you really have no choice but to crank up the intensity, in hopes of eking a small additional gain even though there might not be much of one to be had. So, I also view the choice of training intensity in the context of one's overall plan/progress...