What does each level signify?
Is there a scale that indicates what each level is supposed to be representative of? (hypothetical example: Level 10= advanced)
Yup, that's true. I guess you could redo lessons over and over and over again and get to a higher level, without progressing anywhere.
I saw someone here in the forums claim the Duolingo course equals one semester in university, if that helps in any way... However I don't know if that's true.
the levels don't really mean anything outside of DL. When you finish your tree you are somewhere inside of A2 CEFR standard, which is basically level 2 out of 6 (A1 - C2). I took a CEFR test online and I passed A1, but bombed out in A2, so that leaves me at A1 according to that test, but I should mention that the test was Spain spanish which included a lot of vos/vosotros questions which DL doesn't teach. I am fairly confident I am at A2 level, just need to find another test that is Latin American spanish.
I believe there is only one institution that delivers Spanish CEFR titles: Instituto Cervantes. They say they accept any kind of Spanish; but that actually means you have to know them all. Not to the same extend (you can have a Mexican accent and use mostly Mexican vocabulary), but you must at least understand. I passed an Instituto Cervantes exam and we did have many different materials.
Even the standard of a student after finishing the tree will depend on how much time he's spent on learning the skills. Someone clearing each skill with just 10 points (not thorough) versus someone spending more effort and clearing all skills with 13 points (basically thorough knowledge of all that Duolingo has to offer) will definitely be at different standards.