Audio Research SP16 annoying volume control

The problem you identify is one I also experienced, mostly because I am using high efficiency speakers. There simply was not enough flexibility when listening to high output sources (i.e. CD's) at low volume levels. The good news is that it is an easy problem to solve. Send your unit back to ARC and have them do their "gain modification" which simply involves dropping a high quality resistor in whichever source you would like to shelve down the preamp output. I only did the CD input so the mod was called the "CD only gain modification". Now I have much more flexibility when setting the volume during CD playback, particularly at low listening levels. A secondary effect is that the volume is now matched for CD and LP playback. It cost around $60 if I remember correctly and they did a thorough check up on the whole unit while it was there.

Matching to an ARC amp will not necessarily fix the "problem". You either need to step down the output from the high level sources as I indicated above or buy one of their newer preamps, such as the SP17, LS17 or LS26 which have more steps (nearly double) in their volume control settings. Of course you could choose to leave things as they are and enjoy the music albeit without the ability to adjust the volume exactly as you like.