They might fill the wheel well out some more, but you're also raising the car up by the same amount. If you're going from 18s to 20s then you would "fill the gap" by one inch *and* raise the car by one inch (assuming no change in height due to tires), which gives your 2 inch increase in diameter.
I tried to explain this to my wife when we went from 16s to 18s on her SLK. The proof was when we put the 18s on without a drop and it looked like 4x4 (moreso than it already did). It looks great now that I lowered the car by 1 inch.