Thanks for all the replies. I’m just dipping my foot into audio so I will misunderstand and mix things up a lot as I learn about it all. For some reason I thought I read that you didn’t want to be above or below input sensitivity.
The 3700 should be able to run the pre outs and also internal amps yes?
What is best practice for external amps vs internal? By that I mean is it better to have the denon amp the in ceiling speakers and external everything else? I suspect only amping two channels with the denon should help balance everything out though in terms of how much power everything gets so it probably doesn’t matter too much how I set it all up.
Yes the 3700 can do both external amps as well as internal amps simultaneously; generally avrs that have pre-outs, they're live all the time. Most might put more powerful amps on the front three or maybe five or even seven channels, or all of them; keep in mind a doubling of power is only 3dB more spl, too but at least doubling/tripling power via the external amp is more what I've done when using external amps and generally just the front three myself (in 7 and 9ch setups). The 3700 tested as well as several dedicated pre-pros over at audiosciencereview
https://www.audiosciencereview.com/forum/index.php?threads/denon-avr-x3700h-avr-review.15031/
The pre-out level just needs to meet the amp's sensitivity rating in order to take full advantage of the amp's output capability, and the Denon is more than capable of 1.2V in any case. Try this article perhaps
https://www.audioholics.com/audio-amplifier/amplifier-voltage-gain
In your case the external amp is close to the rating of the Denon; maybe just to take some of the load off the Denon I might use it on the mains that get most of the work. The more sensitive your speakers are the lesser your amp needs are, too, maybe just taking some of the demand away from the single power supply of the Denon. I've got an avr I use external amps with just because they're lying around (and are 3x the rated power of that avr) but I really don't need them at my listening levels, nor do I use any on several other avrs I've got setup.
You might also play around with this as what speakers you have at what distance and of what sensitivity all come into play
http://myhometheater.homestead.com/splcalculator.html