Hi Peter,
I'm not sure I can do full justice to this question, as it's quite far-ranging.
The definition of white noise is that it is noise that occurs at all frequencies with equal probability. So, if you measure white noise in Full Res mode in AudioTool, the spectrum should be flat - the noise doesn't prefer any particular frequency.
Pink Noise is like white noise except the probability that the noise occurs at a given frequency f goes as 1/f. This means that higher frequencies are less likely to appear. If you measure pink noise in Full Res mode in AudioTool, then the level of the spectrum should fall as the frequency increases.
The octave modes (as opposed to Full Res) are sums of energy across frequency bands. For example, in 1/1 octave mode, the 8000Hz bin shows a level that comes from summing up all the energy between the 4000Hz bin below, and the 16000Hz bin above. So the higher the bin, the greater the range of frequencies it contains. If you look at pink noise in 1/1 octave mode, then the level of the spectrum should be flat - the 1/f fall is compensated by summing more frequencies as you move upwards in frequency.
White noise in 1/1 octave mode should show a spectrum that rises with frequency.
I think the reason we use pink noise to make acoustic measurements is that our ear hears pink noise as "flat" - it doesn't sound accentuated at any particular frequency, as opposed to white noise, which sounds "hissy".
But others more experienced than I am may have more to add.
Julian