Adequate representation of frequency domain amplitude/magnitude of FFT of a signal
The correct way to group multiple bins together is to multiply each complex fft bin output by its complex conjugate (which gives the bin power) then add all the bin powers together and divide by the number of bins in the group. If you want to display in db (which is the conventional approach) then take 10*log10() of the result. Negative db values are normal and expected. 

Note that if your audio signal is music, it is quite normal that the spectrum falls off with frequency.

Also from your description it sounds like you are not using a 2 ^n number of points. It's best to stick with 2^n data buffer sizes to maximize the efficiency of the fft computation.  

Bob