OK, high school theater sound guy here.

Maybe the trim is too high? Also, check the input/output levels. These have a big impact on the volume. If you think it's too loud in the recording, then turn down the output. Keep in mind that mics are not the same as pickups; mics are sensitive to echoes and quiet noises. Pickups are sensitive to direct vibration if acoustic, and electro-magnetic pulses if electric. Try hanging some sheets for room echoes. Don't forget to turn off the computer sound either, this is also a possible source of the echoes.

For the background noise, take about 5 seconds of ambient noise (when recording, you have to be SILENT.) put it onto another track, invert it (this will cancel out any ambient noise in the recording) and loop it for the duration of the actual recording. You will have to play with it to get this to work, but the result should be clear and crisp recordings. As far as I'm aware, this is done on TV shows' sound.
Note: this can only work if the ambient noise follows a set pattern. A constant buzz qualifies for this, though timing is going to be a bitch.

As for the selection box, that can only change if there is more than one input. If your computer does not have a built in mic or the settings are off, the only choice is the mic jack.

This is from my experience as a sound guy, so I hope this helps.