The dynamic range slider refers to the timbre differences that are inherent in the instrument. In other words, when you increase the slider, for let's say a violin, it's analogous to increasing the pressure of the bow on the strings which increases the volume but the timbre changes; it's a louder and harsher sound not just a louder sound. At least that's how I understand it.
Because some sampled instruments sound louder than others, for various reasons, the velocity fader is used to offset those volume differences in an effort to even out the mix in ensembles.
I usually use the dynamic fader first than "smooth it out," so to speak, with the expression fader.
Does that make sense?