What is it?
The Track Volume/Level Meter controls track's volume and shows the output level. 
 
How to use it
While playing sounds, it controls track's Volume and shows the track's output level.  When the red light comes on, it means the sound is at or above the maximum level.  When the Boost is off the range is 0 - 100%, when it's on the range is 0 - 200%.   When the option key is held down, all the sliders will be moved.

While recording sounds, it controls track's input Gain and shows the track's input level.  When the red light comes on, it means the sound is being clipped.  When the slider is centered the Gain is 100%, far left 50%, far right is 150%.  If no slider is visible while recording, either Auto Gain is on in the "Sound In" Preferences or your Mac doesn't have input gain control.

Notes
See "Sound In" and "Sound Out" Preferences for more information.