Usually it's the other way, Code 3 is lights and sirens. Code 1 is no lights or sirens, cold response. Code 2 is somewhere in the middle but it's not best practice to use, either go lights or don't.
That really depends on the area. I honestly can't think of a single agency in NY that uses that system--most use priority one through four, with one being the highest, or emergent/non-emergent.