Tarun although I utilize an H/K 635 as a processor I run the same settings as you except I have my sub level on the H/K set at -8 and my fronts/surrounds crossover setting are just a bit different (80 on the 80s) but I don't believe I've never had my output level on our 600 past the 9 o'clock position and most often its set around 7-7:30. Anything past the 10 o'clock position I do believe my particular room would come crashing down.
I would think the 7300 and the 635 should be close enough that the settings should equate to darn near the same results, with speaker placement, room size and acoustics all coming into to play of course. I've never had the opportunity to listen to a 500 so I don't know how much of a difference there would be but just by your sub output setting I'd think there is certainly something amiss.
