Okay, this is pretty much the jist of it...
Level I nurseries are basically for normal newborns. The majority of these babies spend most of their time in their moms' rooms and are fine once they start eating and get that blood sugar up!
Level III units are your typical NICUs: micropreemies (babies under 28 weeks and 1000 grams), babies with major surgical or cardiac problems, severe sepsis or pneumonia, etc. Sick kids needing critical care. The sicker ones are usually 1:1 and then maybe 1:2 when they get better. Sometimes these units keep babies until they are ready to go home, so then they might be grouped 3-4 babies per nurse.
So a Level II is somewhere in the middle. They usually keep preemies over a certain gestational age, do some nasal cannula oxygen and lots of NG feedings, keep an eye on kids with suspected infections and give them IV antibiotics. Sometimes can keep ventilated or sick babies, but usually they transfer them out to a nearby Level III unit. You'll see a lot of boarder babies who are too premature to go home with mom but not small enough or sick enough to require an intensive care unit. I think normal assignments in a Level II are something like 4-8 babies per nurse, but I may be wrong.