Blatant level edit
In SMW Central parlance, a blatant level edit is a hacked level where you can very easily tell what level it previously was.
For example, if the first level in your hack takes place on the Yoshi's Island submap, is on the Normal 2 and Banzai Bill sprite sets, and contains a blue hills background with blue sky as well as many Rexes and Banzai Bills, then it's obvious that the level was previously Yoshi's Island 1.
Blatant level edits are frowned on. If your hack has any, then SMW Central is very likely to reject it. You must always push Ctrl+Delete in Lunar Magic to start from scratch, and must leave behind no traces of the original level. The only exception to this rule is in the context of a parody.
Yoshi's Island 1 is the most commonly blatantly-edited level, followed closely by the Yellow Switch Palace, the other three YI levels, Iggy's Castle, Donut Plains 1 and 2, and Donut Secret 1. However, don't think you can cheat SMWC by blatantly editing a lesser-known level like the Sunken Ghost Ship. The users of SMWC are quite experienced at playing the game, and you will eventually be caught.
On the other hand, just because a level has Yoshi's Island 1's GFX and palettes doesn't mean it's a blatant level edit. Super Mario World: Return to Dinosaur Land's first level uses the YI1 GFX and palettes, and some hackers have used them at other level numbers (such as 106, the location of Yoshi's Island 2).
There's one level in the game that can't be edited: Yoshi's House. This is because the game's original credits are very dependent on the level. You can alter the level's palettes if you wish, but changing the GFX or level design will cause glitches to appear. Don't alter the level unless you're using custom credits.
Curiously, SMWC's hack submission guidelines list Level 3, the Top Secret Area, as an exception to their rules on "no blatant level edits". Level 3 is perfectly safe to edit, and there's nothing in the game that's overly dependent on it being the Top Secret Area. This is because Top Secret Area is a very simple level, and few varieties of the theme "two flowers, two capes, and one Yoshi" can be made.