The 18-year old AIS scholarship holder was an impressive 18th in the Ladies' Short program, but dropped outside the top 20 after placing 21st in the Free program.
The World Championships were originally scheduled to take place in Nagano, Japan, however March's earthquake and tsunami saw the event postponed and transferred to Russia.
Lee, from Sydney, completed a sizzling short program that was choreographed by England's 1980 gold medallist, Robin Cousins, which included her first triple toe, triple toe jump.
The jump was so impressive that it was the second highest scored jump in the ladies' short program.
"We were extremely pleased with Cheltzie's short program," her Australian coach, Kylie Fennell, said.
"To perform her first triple toe, triple toe and to score so highly, is a real credit to Cheltzie.
"Her component score was not as a high as we would have liked, but there were 23 skaters after Cheltzie, and often the judges are conservative early on."
While her long program was not as well scored, Fennell said that after an injury-plagued start to the season, Cheltzie was behind the eight ball.
"She landed a perfect triple lutz in the warm-up, but nerves got the better of her and she didn't attempt it in competition.
"But after a late start to the season because of injury, and not being able to compete in Skate America, a Grand Prix event at the end of November, or our own national championships, she's done very well. I'm really proud of her," Fennell added.
By finishing outside the top 18, Lee does not automatically qualify for next year's World Championships, however, with an injury free run she should be well in contention through qualifying events next season.
She will now return to Australia to catch up on her study, before returning to Colorado Springs in the United States for training in the middle of the year.
Fellow Australians Danielle O'Brien and Greg Merriman finished 12th in the elimination round of the Ice Dancing, missing the cut for the main round. Sydney's Mark Webster missed by just one place to make it through to the main draw of the Men's event.