Line level isn't well controlled/calibrated in home equipment... Usually the output has plenty of signal, and the amplifier has plenty of gain, so you can get full-power from the amp when you turn it up and "everything works OK".
Most SPL meters are
A-weighted which is NOT what you want.
Yes, but it may not be that bad... When you reduce the volume digitally you aren't using all of the bits. With "normal" digital attenuation it's not a problem because you can get-down to where you are only using a few bits and at that point you can't hear much of anything so you can't hear the loss of resolution.* Quiet parts on a CD, or the fade-out, aren't using all 16-bits. The problems come when you re-amplify it. And since you seem to have "excessive" analog gain it COULD be a concern.
Note that analog volume control isn't "perfect" either... You tend to loose signal-to-noise ratio and even if signal and noise are reduced together, when you re-amplify the amplification stage adds its own noise. So again, the loss of resolution sounds like noise (if you can hear it).
* Low resolution is heard as quantization noise. If you make an (normal full volume) 8-bit file in Audacity you can hear it. It's like a "fuzz" riding on-top of the signal and like analog noise it's most noticeable with quiet sounds, but unlike analog noise it goes-away completely with digital silence. (If you experiment with Audacity, be sure to turn-off dither.)