I know that some AVRs can ONLY do analog inputs to Zone#2 (and of course an optical cable is not analog). But, I don't know about this AVR.
But, yeah,
if this AVR will do digi to Zone2, then you just gave him a workaround!
@benjibliss Look at the "Pre-out" boxed section in your pics. The only
true pre-amp outs that you have are for the subwoofers (SW). What you need is a main L/R pre-amp output (and clearly you don't have that).
So, as HD said, those cxns that you are using are fixed-level, the volume knob does nothing to that output.