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What effect does DAW level have on tracking?

if you have the track level too high during tracking it might redline yes? So does this work the opposite also? i.e. if you record it too low it will be weak or noisy. And/or does it really matter. I am confused because I remember hearing somebody say that when the DAW redlines it isn't actually clipping but letting you know that when you bounce the track it will clip.

Baby mobile sound effect

Hi there guys, i need some help. one of the songs i will be tracking shortly has a cool intro and i have an idea to make it even better and more eerie sounding. i would like to take the melody of the intro and make it sound like the eerie sound a baby mobile has when it plays back (its the object that normally hangs above a childs cradle playing tunes as it spins around.