The "luggage" or "two up" setting raises your preload. ie. it raises the ride height of the bike. Because it is higher, the mass is higher, the CG is higher, and you will "turn in" more quickly because all that weight is higher up. The disadvantage is the weight is higher and it is "more twitchy" and feels heavier. BMW designed the 55 degree slant to LOWER the mass so the bike would feel lighter and have a more stable center of mass. Of course, as a result, the feeling of lean won't be as dramatic.
The rear shock is sort of in the middle-middle/rear of the bike and I've never measured it, but it would seem to jack the rear up slightly more due to the arm/moment/mass but I doubt it's too much since it's still relatively close to the center. The weight it does transfer forward would put more load on the front wheel, and this can be a good thing and it can be a bad thing though when you are trying to get more weight on your rear wheel. TOO much load on the front will wash it out.
The "Sport/comfort/norm" setting adjusts compression and rebound damping on the rear, and rebound (not sure about this it may be compression) damping in the front (it doesn't do both in the front).
Of course, damping has more to do with keeping your suspension "compliant". Parks (FWIW to you) recommends in his writings to keep it as soft (compliant) as you can without causing dive during braking and lifting during accel. But he's really talking track type roads when he says this. How much damping will help you during aggressive riding ultimately depends on the type, size, and frequency of the bumps you are encountering. Too much damping will cause wheels to come off the ground and too little will cause bouncing (compression) or too much time for them to return once they've bumped (rebound damping).
So, really, ....what is the best setting for sport riding? ....it just depends.