If you shoot an arrow straight up in the air or straight down, it won't matter if your target is 10 feet or 100 yards away; your line of aim will not change because there is no "drop" as we think of it.
If you shoot horizontally, you get the greatest deviation between your line of aim and your target over the shortest distances.
So the closer to straight up or straight down your shot is, the closer you get to zero deviation from your line of aim over any distance. And the closer to horizontal your shot is, the closer you get to maximum deviation from your line of aim over any distance.
In other words. If you're shooting at an angle up or down; aim as though it's closer. The greater the angle, the closer you need to consider it for aiming purposes.
Any projectile traveling any distance will always drop the exact same amount for the same time in flight. So why aim lower than we would expect? Because of the angle of the arrow drop. As mentioned before, if the arrow is shot straight up, it will still "drop" the same amount, it will just drop in the exact same line as the line of aim.