How can I set the volume for windows notification sounds lower than
what my music via iTunes or Media Player is set to without editing all
the notification sound files individually?

Good question! I've played with this issue for years, and never
found a resolution.

If you have a multichannel sound card such as an M-Audio Delta you can
configure windows to use one output channel and your music
applications to use a different one. You then hook up your audio
system to the multichannel mixed output and use the software mixer to
adjust the levels of music and system sounds independently. This is
what we do on our music production computer.

Unfortunately normal onboard sound only supports one wave out channel,
so you can't do it. Perhaps someone has made a program that adjusts
the wav files or something.