I have spent some time looking at the Ruf levels over the last few weeks and am completely stumped as to what to make of my kids.

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Remember that the HG/PG line runs right through Ruf level 3. If you accept Davidson YSP cuttoffs as defining PG, which some do not.

I was really surprised to read this as I have been mulling over the last line of each level saying "there are x number of children like this in an average class/school".

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There are one or two Level Three children in every 100 in the average school. They are rarely in the same elementary class and can feel very, very lonely.
That's level 3, and by percentiles that would make level 3s 98-99%.

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There are about one per 200 children in the average school. Without special arrangements, they can feel very different from their typical classmates.
That's level 4, by percentiles level 4 kids would be 99.5%.

I would have thought HG was around Lvl4 and PG lvl5?

I would say, apart from the reading, that both of my older girls are absolutely Lvl 3 and probably lvl 4 based on description. DD1s scores are certainly not Lvl 3, she's 2E though so I am hoping that retesting with someone looking for that might be more illuminating (and I have asked for her subtest scores, which I have not seen). DD2s WPPSI scores are in the range, so that makes sense.

But even so I find it really hard to get my head around the idea that she's that gifted because she just seems so "normal" to me, and apparently she seems pretty damn normal to her preschool too...