I don't have that particular DAC, but make sure that it is set to the default device in your settings. The picture that you posted lets us know that your computer recognizes it, but we have no idea if it is set for the default for audio or not. Right click the speaker in the bottom right corner and go to playback devices. Highlight the Modi and click "Set as default."
Again, I'm not speaking from experience, but I think it might be grayed out, because they didn't really intend for you to adjust the volume directly from your operating system. If you adjust the volume, I think it changes the bits slightly, so you aren't exactly "bit-perfect" at that point. You are meant to change the volume on your amp.