We still don't have any idea what signal levels you've got. If you don't know, where's it coming from? A microphone might give you 10mV. A full-volume line-level signal (like the audio output from a VCR or DVD player) should be around 1V. A volume-controlled line-level signal or a volume-controlled headphone output mifht be somewhere around 100mV A speaker-level signal will usually be several volts.
But i Still get very low readings. Not the full 1024.
If your reference is 5V, changing to the internal 1.1V reference will give you counts about 5 times as high. (FYI - The maximum is 1023... The ADC puts-out 1024 different values,
from 0 to 1023.
Do i need the Poti and Second 100k Resistor to 5Volts to get better (higher) values from the input?
A resistor can add offset
to give you bigger readings. but, it won't give you a bigger signal... If your signal is 0.1V and you add a 1V offset, silence* is now 1V and your signal is 1.1V. The numbers are bigger, but it's no easier to detect signal or silence. It looks like the offset circuit is there to allow you to read the positive & negative half of the audio signal, without going negative and damaging the Arduino.
*There's always some noise. You may or may not read
noise depending the level and the sensitivity of your ADC.