Dilution of 7:1 is practically meaningless.....there's just no accuracy. You need a good kit that will test higher levels than 3.

Chlorine smell is an indicator of Combined Chloramines and means you need to add morechlorine/ Shock your pool.

Yes, go to another pool store...their numbers were incorrect.

Disregard hardness.

Best of all, get a test kit so you can get your own results....accurately. Walmart's HTH 5-way tests up to 5ppm and will test CYA as well. It's nothing like Ben's, but it's better than what you have.