I went ahead and raised the "preamp" knob in the equalizer, which helps ALOT. But my question is, does that add distortion or any unwanted artifacts? The level is much better, I just want to be sure I'm not altering the sound. By the way, I do have clip protection enabled.
I do this, to compensate for a similar issue. So in answer to your question, if you boost the preamp EQ too much it will clip. If you have clip protection enabled (which I personally think you should), then it is going to effect the clipped part of the signal.
So, what you want to avoid is pushing it into clipping, which will indeed cause distortion. As movies often have very large dynamics, I also do what Brian recommends. Here however you are messing with what I guess you are referring to as "artifacts" as the audio signal is being manipulated -- dynamics are sort of squashed together. As for movies, I don't care, my choice. BUT for concert films and music videos I do care.
So I create 2 Video playback zones. One where I boost just the preamp EQ. The other I mess with other parameters like Brian suggested. (I also have 2 zones of WDM streaming playback, btw). You can set up zone switch rules based on sub-type to flip from zone to zone.
One thing to bear in mind, you have to be pretty careful with boosting preamp EQ, 5 to 10db should be more than enough (10 might be way too much even) ... but as you are adding an external pluggin to the mix, I'm not sure you know how much is being "reduced" as MWillem describes.
The Analyser function can show clipping when put in flat line mode (turn your volume down), but I doubt it would include the external VST you are applying (?). So setting it for dialogue it won't clip but might indeed during an explosion. I'd set it to a minimum. Also the dsp engine is in 64bit, so you have a lot of headroom, before the signal gets mucked up ... a 16bit audio file is -48db, I am not sure how this applies to video though (or if it has anything to do with applying an EQ boost, compared to internal volume reduction).
I suppose I would try to set up the eq boost without your pluggin first, then add it on and make "ear-ball" adjustments. (maybe Mwillems has better advice though, I'm not a real "DSP" expert?)