[JohnM]

The level at which REW was calibrated doesn't really matter, that process just allows REW to relate the size of the signal on its input to a corresponding dB SPL level so that it can draw the measurements at the right level on the graph.

The target level adjustment is used to set a reference where the response would lie if there were no resonance contribution from the room. It is something of a best guess, as it is very difficult to separate the contrubutions of the resonances from the underlying output of the speaker being measured. The target level can be set manually, looking at the response and estimating where it should lie, or by letting REW make its best estimate using the "Set Target Level..." option in the Target Settings - REW does it by generating a test signal and measuring its level, which may or may not be more accurate than using your own judgement.

The target level is important because the gains and bandwidths of the correction filters are adjusted to bring the measurement on to the target line. The filters should be countering the effects of the room's resonances, if the target level is too high the filters would be taking out too little of the resonance, if it is too low they take out too much.

This process is a bit too manual at present, I'll be looking at providing further automation and more accurate determination of the contributions of the room's resonances and the best filter settings to counter them in a forthcoming release. That will also include features to automatically determine the settings for filters that shape the response to bring it to a preferred characteristic, such as a desired house curve.