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Okay, first off, that attenuation screw is just for that purpose. (as a side note, the screw adjusts the output level, not the input level) Most bedroom djs never have to worry about this because most of them don't use amps (I'm assuming). They work off the amp in the receiver that they plug the rca cable into. It is definitly okay for you to use this screw to adjust the volume level so that (I would suggest anyway) you start hitting red on the master around 6-7 range. This is of course, with the gains on the channels adjusted so that you are right at or just above the 0dB level (oh so slightly into the red).
If you have the master volume at 6-7 and it starts to dip into the red, then you still have a little bit of leaway to turn it up more if you want, though I would just use the volume on your amp, speakers, receiver etc and not the mixer. Once you start hitting red on the LEDs, then you start distorting the source. This is bad. You can get away with hitting upt to about +4dB, but after that it may become noticable distortion, and when recording, I would try to preserve the original source as much as possible, so I wouldn't peak more than +2dB.
Now, as far as booth and master outputs go, it depends what you want from your setup and what you have. The master goes to the main house speakers, and the booth is for the dj monitors so that while mixing, the dj can adjust the volume of the speakers in front of him so he can adjust them to an appropriate level. You also have a record out. Guess what that is for  The record out is great because the master volume and master balance does not affect the record out volume levels. This way, if you have to turn the volume down at the speaker level, it won't dip on your recording etc. Anyway, tell me if this helps and if you need to know more
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