I've run mine with peaks as low as -25 dB (not on purpose) and as high as 0 dB. As long as I'm not clipping it sounds good to me, even if I have to add gain in post. So what I am saying is the recording level "sweet spot" is wide, at least in my experience. This can actually be a problem for me since I feel I should be doing something during the recording, where in reality the best thing I can do when rolling is to keep my damn hands off the pots.
I don't worry about clipping applause since clipped applause sounds a lot like regular applause until it is way overloaded, and I edit out most of the applause anyway. However, for the music and venues I record in if the applause is clipping and the music is not, that probably means my mics are too far back.