They like stinky stuff...a LOT! They can smell you from a distance, but where's the fun in that!

Because of my organic, mostly raw food diet, my sense of smell was sharper than that of my dogs, in some cases. At least, it seemed that way, because of my height.

On hikes, I'd sometimes pick up the higher wind scent of a whitetail buck before the lower-to-the-ground dogs did, and when we reached the place where it crossed the trail, and I could see the tracks, the dogs would go crazy with excitement, sniffing the air.

I also had razor-sharp hearing, so on night hikes I could keep track of surrounding wildlife by both sound and scent. I'd murmur to my ex, as we came down a trail in almost pitch darkness, "Buck following us at two o'clock, 30 feet away." or we'd hear a sound and I'd say, "Red fox at 10 o'clock."

I also picked up on smelly scent markings on trees, and scent scrapes in the trail. I used to read wild animal tracks in the woods like one reads a newspaper, and knew the animal residents..when they hunted, and with whom, their new babies, what they'd killed, etc.

I knew the genders of the animals by the foot placement of their tracks..females step on the outside of their front paw prints with their hind feet (broader hips) while males step on the insides (broader shoulders).

Dogs are nixe animals. I love them.

But a normal sound for us must sound extremely loud for dogs

And why is it they love to stick their head out the window of the car at 60 mph, but they get pissed off if you blow in their face?

My dog hated loud noises and lost some hearing with old age.

As for sniffing butts - dogs do not isolate smells into "Good or bad" categories.
Therefore getting on top of another butt or crotch - is not an issue. (And I agree with the person who said "Dominance" ).

But a normal sound for us must sound extremely loud for dogs

Because they like it. I know our Nora (R.I.P) could detect pee from a new dog in the neighborhood at about 20 yards out. I'm guessing the close-in butt and crotch sniffing is some combination or social and dominance.

Many dogs do go nuts over percussive noises (guns, fire crackers).

What makes you think there are no insane dogs?