According to this paper by M. D. Baker and A. W. Reid, if $\Gamma(N)$ denotes the principal congruence subgroup of $\mathrm{SL}_2(\mathbb{Z})$ of level $N\geq1$, then it should be a straightforward observation that $$\Gamma(N)\text{ is generated by parabolic elements}\iff X(N)\text{ has genus }0.$$ A parabolic element is a matrix $A\in\mathrm{SL}_2(\mathbb{Z})$ with trace $\pm2$, and $X(N)$ denotes the compactified modular curve associated to $\Gamma(N)$. I'm still learning about congruence subgroups and modular curves, so my question is:
Q. What's the explanation behind this observation?
I know that, for $N\geq3$, $X(N)$ has no elliptic points and its number of cusps $\varepsilon_\infty(N)$ is given by $$\varepsilon_\infty(N)=\frac{N^2}{2}\prod_{p\ \mid\ N}\left(1-\frac{1}{p^2}\right),$$ while its genus $g(N)$ is given by $$g(N)=1+\frac{1}{24}(N-6)N^2\prod_{p\ \mid\ N}\left(1-\frac{1}{p^2}\right).$$ Perhaps this has something to do with the fact that $\Gamma(N)^\mathrm{ab}\cong\mathbb{Z}^{2g(N)+\varepsilon_\infty(N)-1}$.