The cups were indeed minor competitions which were competed for by the reserve sides of the various clubs. Whether some of the clubs fielded very strong reserve teams as they progressed could have happened as it had happened elsewhere for similar trophies. What is surprising is the capacity of some of the local football grounds and attendances of those grounds where a few thousand spectators at a match wasn't uncommon.
As a footnote to this as a teenager I went out with a girl whose grandad played for Newcastle but got a chance to move to South Shields, I asked him why and he said quite simply more money. The football league had a salary cap,lower leagues didn't and those with decent attendances often paid a higher wage than football league teams.