I just did some reading based on what you said. The sensitivity is
actually based on a minimum S/N ratio... and if I understand
correctly: if an audio signal comes in with a strength of 1.0uV and
the receiver sensitivity is 1.0uV, it will be understandable?

If you are using FM then you will see a specification of say .5uv sinad or
..7 uv for 20 db quieting. Usually that is about the same real world
sensitivity unless I have it backwards for sinad and quieting. This level
is for understandable audio. FM has a threshold level in that you get a
bunch of noise with the audio comming out of the receiver tuil you hit the
threshold point and then just a small aditional ammount of signal will clear
up the audio. Any more signal will sound the same. You should hear the
audio just fine at the above levels.

As far as the fade margin goes, the 0 level is what you get for the above
sensitivity. YOu will need some ammount above this level to get a good
signal all the time. At vhf and above for a distance of say 30 miles you
will have a signal of so much for maybe 70 % of the time. To get to the 99
% or more you may need 20 or 30 db of fade margin. Maybe 2 % of the time
you will have a stronger signal . All this is due to the way the atmosphere
bends the signals.