What's the meaning of "straight and level"?
Is this use of "straight and level" correct? What is the definition of
  straight and level, if any, regarding heading, attitude, speed,
  altitude?


In the airplane flying handbook the FAA defines straight and level flight as 


  Straight-and-level flight is flight in which heading and altitude are
  constantly maintained.


My understanding and the instruction I have received has always lead me to understand that Straight-and-Level is independent of Attitude and Speed. However to maintain straight and level flight at a given speed you will have to put the aircraft in a given attitude. Generally speaking at lower speeds aircrafts have a higher nose up attitude to maintain level flight and a more nose down attitude at high speeds to maintain level flight but this can vary by design and wing mounting. 

In this case I would say it was used a bit improperly. The statement should have been more along the lines of "the pilot should have maintained his heading and conducted a straight ahead emergency landing. You can read more on why that is here.

You can refer to the full NTSB report of the accident here for all the details.