Hi Roshan,
While it is true that the primary goal of calibrating your system is to balance the levels amongst your multiple channels, the secondary notion is that you can achieve a "reference" level. The numbers associated with the volume knob on your receiver "CAN" mean something, if you calibrate to a certain level, 70db and 80db are the most common.
There is another important consideration, though:
Subwoofers with "auto-on" switches need to see a certain level in input voltage before they turn themselves on. Let's say you attenuate rather than boost individual speaker levels to balance them out- you run the risk of adjusting the subwoofer down to such a point that, at low listening levels, the sub may not switch on. Conversely, if you calibrate to the 80db level, you are almost certain to achieve a good, uniform level with output signals strong enough to turn on your sub, even at lower listening levels.
Level calibration and EQ work are two totally different beasts. The notion of attenuating frequency bands when adjusting your EQ is accurate. This is because you want to "control" wary room reflections and standing waves- you want to reduce the bad stuff so that the naturally good, flat responses shine through. You don't want to boost the other bands to try to match up to unnaturally hot frequencies due to room variance.
Hope this helps and good luck!
CD