Should I set all speakers flat on reference level or should I adjust levels like center +1 db and rears -1 db? What do you think is best setup and why?
I think the others who answered have already said this, but it can't hurt to repeat it.
At first, use the SPL meter and pink noise to adjust all speakers to the same level. Pick one central seat to use while making the adjustments. It's a good idea to write down those settings.
There's no particular loudness level required for making these adjustments. I find 75 dB useful because it's loud enough that any noise from my heat/AC ventilation system or refrigerator doesn't interfere, but not so objectionably loud as pink noise sounds at 80 dB or higher.
Listen to music and watch movies with those initial settings for a while – long enough to get a sense of how things sound with a variety of movies and music. Sometimes, there are a few movies where the dialog is not loud enough, but you are looking for the general state of things, not the exception.
If you think you need it, raise or lower the center speaker. Same goes for the rear channel speakers, except you are asking yourself if the front-to-back sound is balanced or not.
There's nothing wrong with adjusting those initial settings.