Level 3 is fine, if you're at a dinner party or something like that with people you don't know and you just have to talk to someone because it's boring otherwise. Usually social situations work better though if there's some sort of shared activity or purpose to the event.

Think about how people meet all their best friends in college and in high school. At these stages of one's life people haven't been split off into their social segments yet and have plenty to talk about because they are helping each other study for exams, or playing on sports teams together or working on other practical projects like organizing clandestine weekend keggers. It's in these situations that people really get to know each other, instead of just this social filtering process that usually passes for conversation.