
When you ask about the number of levels for "Undo," I hope you're asking how many steps backward you can go.
In EQ5, you can set Undo to go back 20 steps by going to FILE>Preferences>General. You can set the number of steps between 2 and 20.
I suggest if you need to go back more than 20, you should probably start over.
To remove blocks that have been placed on a quilt layout, you can either set another block on top and that will be a replacement. Or you can go to the block worktable and save a block that has no drawing on it. This becomes your "plain block" that you can set into a block space and color with fabric or a solid color. You could also place a block with a design on top of this block to replace it if you choose to do that.
In EQ7, you can set the Undo between 2 and 20 steps by going to FILE>Preferences>Project Properties>General. In EQ7 it is easier to replace a block set on the quilt worktable with the Erase tool on the Design toolbar or with a Plain Block that you can create with a couple of clicks from the Sketchbook Block display (go to View Sketchbook OR engage the Set Block tool and click the down-pointing small black arrow in the top right corner of the display).
Hope this helps!
Barb