So it's elevation 3 that treats elevation 2 as though it were elevation 1. okay that was much easier than it looked

Oh, that's efficient. Get that in the PG, stat.

Yep, basically.

You should do the write-ups

"When you are on Lofty Terrain, all elevations at level 2 are considered to be level 1."

Yep, easier.

Based on the wording of the special rules, I would suspect that this map was created/printed before the 2011 rules were set. So there wasn't stuff like "levels" to reference.

Ok, just so I know I have this right. A character on lofty terrain (lvl 3) can shoot a character on ground terrain (lvl 1) even if it would normally be blocked by elevated terrain (lvl 2) but the character on lvl 1 would not be able to shoot back, correct?

That is correct. Just remember that Lofty Terrain is not actually level 3.