A nice question! Your problem stems from a mistranslation of "ערוה" here as "nakedness" rather than "private parts".
"ערוה" is indeed a very vague word (as Jastrow describes it), covering all kinds of physical and metaphorical "nakedness, shame; unchastity, lewdness, obscenity". However, in this specific case, it designates specifically male genitalia.
Here's a somewhat better translation:
"And you shall make for them linen trousers to cover their genitalia from the waist to the thighs."
Therefore, Cohen's boxers should cover the genitalia from מתניים (waist) to ירכים (thighs). No need to cover the thighs.
(Joel's comment): indeed Rambam MT Vessels of the Sanctuary.8.18? describes the trousers as going from under the heart to the end of the knees:
הַמִּכְנָסָיִם בֵּין שֶׁל כֹּהֵן גָּדוֹל בֵּין שֶׁל כֹּהֵן הֶדְיוֹט הֵם מִמָּתְנַיִם עַד יְרֵכַיִם שֶׁהוּא לְמַעְלָה מִן הַטִּבּוּר קָרוֹב מִן הַלֵּב עַד סוֹף הַיָּרֵךְ שֶׁהוּא הָאַרְכּוּבָה.
This is based on the Gemmarah Niddah.13b that describes fashion choice of the trousers:
"it is taught in a baraita: The trousers of priests, to what are they comparable? They are similar to riding trousers of horsemen, and this is what they look like: Above, they reach up to the loins; below, they go down to the thighs, and they have straps, and they have no opening, neither at the back nor at the front.
But I don't see that the extra parts relate to nakedness rather than the fashion style.