Yes you want all your speakers to be at the same level. The level allows the surround system to provide the right volume of sound and in some instances it can be as loud as the mains. The distance setting allows the surround processor to actuate each speaker at the proper time to give you the surround experience by allowing the sound to get to your ears at the right time. Since sound travels about 1100 feet per second the difference in distance of the speakers to your prime seating position is important. For the best experience set the distances first then the levels. Although the Polks go down to 35hz your sub is much more capable than the Polks down low. I would start with the setting at 80 hz and work from there. I usually set the sub distance with a tape measure and the volume using a meter from Radioshack and then by ear using some sources that have great bass effects. It is likely that the small microphone on your phone is not sensitive the LFE and doesn't see it.