If there are air bubbles in the line going to the carb, yes, you have an air leak. 3 1/2 turns open... very wide open for any temp/pressure. You don't say how long you've been flying this airplane, but hair splits in fuel lines is a fairly common occurence. I would replace the line from the valve to the carb, run it and see if your bubbles are gone. It's also possible that the "O" Ring in the needle valve is worn and allowing air to enter.
As far as the darker oil color, it could be any number of things, but one I'd check first is that the hardware holding your muffler together is tight.

Andy