I know crunch when I hear it but can somebody explain it in regard to terminology / amp settings?
Crunch sound is when an amp is turned up to the point where it begins distorting. Amps did not have master volumes, so old school crunch was attained just by turning up. It involves both the power tubes distorting as well as the pre amp circuit, but not necessarily a lot. The speakers to a certain extent too, as well as output transformer saturation. Modern amps with a crunch channel and a master volume try to emulate those stages of distortion, while also offering high gain modes where the distortion is generated mostly in the pre amp.
Crunch has some clipping distortion and also the amp is compressing. However, there is also a certain cleanness to some of the overall sound. It is a loud and powerful sound. Archetypal crunch benchmark is probably ACDC. Dirt pedals and amps with dirt channles were originally trying to emulate the crunch of a non master volume amp turned up so much it distorted. Crunchy overdrive created by turning up was a kind of happy accident when people like Chuck Berry turned up their Fender Bassman etc. The amps were designed to be clean, but were pushed beyond their limits.
I you ever watch a tech bias and test your amp, you can see the 'crunch' on the oscilloscope when the amp is raised to full power. The sound wave on screen distorts and compresses at the peaks. When you hear the term 'clean headroom', it means how loud the amp can go before that happens, i.e, how loud it can get while still being technically clean.
Settings for crunch? Gain down, Master up (gain in this case is pre amp). Some amps you need to turn the bass down. Depends. A lot of players would set their amp to really overdrive when the guitar is on ten, but roll off some volume for their crunchy rhythm sound (then roll off more for clean-ish).
p.s. There is a MI Audio Crunch Box on TM at $1 reserve closing soon. Currently at five bucks. Will give you a more crunchy sound without having to turn up so much.