What in the world does this iTunes Terms & Conditions about Virginia & California mean?
"For avoidance of doubt" is legal speak for "let me summarize this in a way that handles any and all cases I might not have explicitly called out in any clause in the contract". It's a catch-all term used to say "this is it". It can cap damages or dues or liability. Here's a good example and explanation:


  Contract clauses beginning with the phrase, “For the avoidance of
  doubt” are a common feature of business contracts.
  
  For example, Company A is negotiating a three-year contract with
  Company B to purchase twenty different products from Company B. The
  contract includes ten pages outlining minimum purchases, pricing and
  quantity discounts, price adjustments for changes in raw materials
  costs, methods of calculating credits for returns, etc., with
  variations for each product.
  
  Company A carefully analyzes all the different combinations of prices,
  refunds, etc., but wants to make certain it doesn’t receive a big bill
  as a result of unanticipated future permutations.
  
  Company A might insert a clause in the contract that says, “For the
  avoidance of doubt, Company A will never be required to pay Company B
  more than $2 million during any calendar month.” (PG has somewhat
  simplified the likely language.)
  
  With this clause in place, as Company A’s CFO manages cash flow, she
  knows she will never have to write a monthly check for more than $2
  million to Company B.


In the case of the iTunes contract it says first that any of "Gift Certificates, iTunes Cards, and Allowances" are handled in the state of Virginia -- presumably they use this state for these transactions as it offers something ammenable to Apple when it comes to handling these things. You can see what Virginia has for state laws around gift cards here. They're rated "red" by that site meaning they're fairly anti-consumer, pro-seller there. From their summary chart:


  Good
  
  
  Only cards with an expiration date escheat to the State of Virginia after 5 years
  Virginia has legally defined the notion of a gift card
  Virginia has legally specified whether or not gift cards escheat to the state
  
  
  Bad
  
  
  No limits on expiration dates
  No maximum post-sale fee or minimum time frame before charging monthly fees
  Merchants are not required to give cash back
  Virginia does not maintain a consumer-centric web page dedicated to gift card laws
  


Those bad things would look good to me if I was Apple.

As for "Content Codes" passing to you via California, again it likely goes back to some legal goodness the state of California affords a company sending out content codes that other states do not. So Apple says "we're doing this type of business, with you, via California and you agree to that".

Caveat lector: I am not a lawyer; I just play one on the Stack Exchange network...