When using amplify, Audacity will tell you how much you can amplify without exceeding 0dBFS. To amplify to a level greater than 0dBFS (I don't know why you would, unless the peaks in your file are applause perhaps) you have to check the "allow clipping" box. That's how it works in my version of Audacity at least.
If I'm going to burn a CD for distribution, my last editing step is to amplify to a peak level of -0.5 dBFS. I do this to allow some margin for the playback equipment. The -0.5 dBFS level is arbitrary; I've heard of people using anything from -1.0 dBFS to 0 dBFS.
I don't know why you would allow more "growth" for 24 bit to 16 bit dither, but I'm willing to learn if you can explain.