For example, if a school reported the average GPA of incoming freshmen to be 3.7, would this mean the average grades of these applicants were A- or roughly 3 A for every B.
It depends on the college. If the school recalculates GPAs during the admissions process, 3.7 is probably the average recalculated GPA. Otherwise, they probably just average all the unweighted GPAs coming from all the different high schools, which offer different classes and have different grading standards. For that reason, I wouldn’t make too much out of whether the average GPA is 3.7 or 3.8 or whatever. All you can really tell is that your GPA needs to be pretty high.