Note that the Zoom H4n can record 24 bit samples. If you set your input level so that the loudest sound peaks at half your available headroom, your recording will effectively use 23 bits. That's still plenty of bits left if you plan to downsample to 16bits for your finished product. Unless you are looking for the coloration of a specific limiter or preamp, you are always better off setting your recording levels low and your sample size high.
Also, it should go without saying that you should record uncompressed. SD cards are dirt cheap, so capacity shouldn't be an issue.
Here is why using a 24 bit sample rate helps with headroom. A 24 bit integer has 16,777,216 different values. A 23 bit integer has exactly half that, 8,388,608. A 22 bit integer has 4 million. This is because each bit doubles your resolution. Conversely, if you use only half of your available headroom, then you are only throwing away one bit, not half of your bits. So you could adjust your input so that a peak only uses 1/4 of your headroom, and you'd only be throwing away 2 bits. That leaves you with 22 bits of effective resolution. Still six bits more than CD-quality at 16 bits.
That said, your ADC will probably be more accurate for large sound pressure differences than small. So you don't want to throw away too much dynamic range. But throwing away one or two bits should be fine.
