My SOP for leveling...
For instrument input, set it so that your loudest guitar on your loudest pickup configuration with the controls full open. It's fine if your heaviest playing "tickles the red" (i.e. occasional red light activity is okay when you're really hitting the thing, but if the red light is full on when you play light, turn the instrument input down). Set it and forget it, it's just optimizing S/N for the DAC so no need to sweat it too much, just get it to be a best fit for your guitars, and don't fret over it past that.
For output leveling the meters an internal scale of -20 to +10 with the red line at 0, so you generally wanna be hovering around red line, fine if your loudest parts go a little into the red (as there's still probably 6-8db headroom to go from there), and fine if your quieter parts are bellow the red, but in general average volume should be around the red line. If you're constantly in the red, you're not going to have any headroom left and could get into digital clipping when you kick on a boost for a lead so more than likely you wanna bring down the level of the amp block. It's basically same rules as leveling in the AxeFx II, I try and sit around the 0 db internal line, which gives me about -10 to -8 ish db in Logic and I still have room to go from there for the track before it clips out. Level all your preset to match and balance with one another, use the meters as a guide to keep any clipping in check, but most of all trust your years. Again, I generally level presets for my loudest guitar, as if i'm playing a guitar with weaker pickups I generally want less input hitting the front of the amps, if i want a similar oomph to hit the amp on a really dramatically weaker pickup. i'll use a micro boost drive, or a flat filter with a level boost.
All of this is assuming your pickups are broadly similar (I'm a low output passive pickup fan myself), if you have one set of active pickups and one set of passive pickups, I think you may want to do presets or scenes that have the amp block level'd completely differently, as active pickups are really gonna push everything that much harder, but then again you're probably going to want to adjust amp's input drive as well, as what's "edge of breakup" with a passive single is gonna be full on crunch with an active humbucker as you've got such a hotter level hitting the front end...
Once you're presets are good and internally leveled in the AxeFx, just a matter of turning your front panel output knobs and the level knobs on your mixer/monitor/pa/power amp/frfr cab to get a comfortable volume and make sure you're not wrecking input trim on anything downstream.
If I have a preset that occasionally just gets "too loud" with a certain guitar (or any kind of boost pedal run in front of the AxeFx), I'll just bring the level down to taste in the output block at that point, as I'm confident my preset is leveled well throughout.
Page 5 and pages 48-50 of the manual cover leveling of input and output really well, I've found it handy to re-read occasionally just to make sure I've got my understanding of the various level staging in the signal chain correct.
