Happy to hear it arrived in a good shape and you are enjoying it!

I've had it on for hours while working on the laptop too, mostly on decaying reverb, typing sounds very cool with it.
Yes that's correct, the line input should be wired to MIC2 and AGND. But there should be 100nF-470nF caps in series with L/R lines (with larger capacity, lower frequencies get transferred - I usually add 220nF only, sounds great with them). The
datasheet with more details about the codec is here if you need to check something.
In the current firmware there is no automatic detection or option for this yet, but there will be a parameter in config file to switch to the third and fourth option - line-in and both mics & line-in mixed, by pressing (+) and (-) together, the same way as you can now switch mics on and off. And perhaps add an option to make this a persistent setting that is remembered during power off.
By the way there is a
new article about expansion board, planned to have it in the shop but there is a small error in it that requires rework,
the 100k resistor needs to be mounted sideways. Until I get to fix it and order more, there are a few available - feel free to email me if you are interested in one. It expands Line-in and out, and also MIDI both ways through the 3.5mm Jack. Here it is
shown in action, it's the previous version that did not yet have LEDs and used different keypad driver that did not work well.