So, are you telling me that the sound when connected to Audio 3 line input is quieter with the switch set to line then phono? If that is so then the internal preamp of the Sony is defective. We have run not this issue before with that turntable.
In all honesty those turntables are absolute junk. I would return it.
Analog devices are not like digital ones, where budget equipment can work quite well. That is not so with analog devices like turntables. You have to spend some significant money for a decent turntable.
If you really want to play LPs,
this is really the entry point for LP playback and you will need a phono pre amp for your receiver with that turntable.