Contemplating whether to fork over 40 extras Euros or to take a cabin on the lower deck (Deck 2). What's the difference? Is Deck 2 really noisy?

What level is Deck 2? If you mean the couchettes (rather than cabins), which I think are below sea level/car deck, then they are truly horrible. They get very hot and are quite claustrophobic with no windows. Also more noisey than the cabins, though I wouldn't say unbearable. Overall I'd try to find the extra money.

If you're taking about the difference between standard and executive cabins, I wouldn't think noise was much of an issue.

Deck 2 cabins are only available on MS Crown of Scandinavia sailing btw. Copenhagen and Oslo along with MS Pearl of Scandinavia.
Deck 2 is below sea level and below the two car decks in the mid of the ship.

Look at these deckplans for the two ferries in order to locate the cabins:

MS Crown of Scandinavia
http://www.dfdsseaways.de/mediafiles...%20o.%20S..pdf

MS Pearl of Scandinavia
http://www.dfdsseaways.de/mediafiles...%20o.%20S..pdf

While I don't have any experience with these, I would rather opt for a higher deck - even if it is more expensive.
Cabins on Baltic Sea ferries are usually quite small and I always pay a bit more to get an outside one as they make me feel less claustrophobic.
If you can get one of these, I am strongly advocating to take a ferry as they are IMHO a lovely way to travel in relaxation - and the fresh air is hard to beat.

It appears that I booked an 1 x Inside xsize cabin with single beds. Doesn't say whether it's deck 2 or not. There are no outside cabins available right now. Any opinions on dinner?

Smorgasbord.