After a forum search, I've found numerous posts as to how to -increase- AI traffic sounds. However, I'm finding mine too loud- to the point where it overpowers the sound of my own engine. Is there a way to get rid of, or seriously tone down these sounds?

Try turning down the "environment" slider in the sound menu.

 

If this doesn't work, you'll have to edit the files manually with a tool like Audacity.

Ok I'll give it a try. I have audacity as well, so that'll be my backup. 

 

I've noticed aisound folders in some of my AI aircraft folders (world of ai), as well as aitouch/aitprop wav files in the general sound folder, as well as sound folders pertaining to traffic in the simobjects/misc/traffic... Do you know which ones in particular are getting called up?

If the AI aircraft uses a sound.cfg, the sounds from the folder that's referenced in there will be used.

If there's no sound.cfg present, the sounds in FSX\sounds will be used.