First off, what size room are we talking about?
No problem on blowing the sub (certainly not at 1/4 gain) as the amp for the sub, would cut-off before harming the driver.
The +2 on the receiver gives us NO indication at what level you are playing the sub.
Do you have a SPL meter?
Is this being used more for movies? or music? or 50/50?
The question (at what point is to much bass), is 100% a personal taste, so that is not an answer anyone can give.
And yes, that is what he means. If the sub does not have a bypass switch, set it to the maximum on the sub (crossover), and for ease of use, adjust it in the AVR.
(although, I am pretty sure that the sub does have a defeat switch)