The level is probably ok, the failed login for bad password message is a "Warning" level message and you're getting Info if you received the message you posted.
But... the command under config term is...
logging trap 7
The 7 is the logging level. If you do a show logging and post it (remove any proprietary info like IP addresses) We might be able to see what the problem is if those logs are not making it to the server.
The fact that you are getting logs means that it's working, we just need to tweak it a bit.