Rails applications come with six different log levels: debug, info, warn, error, fatal, and unknown. Each level defines how much information your application will log, ranging from the most verbose (debug) to the least informative (unknown). By default, Rails applications generate logs at the debug level for all environments, including production. However, this can be adjusted by editing the applicable environment file. The info log level provides a good balance between diagnostic information and verbosity, making it suitable for development or test environments. Lograge is a library that transforms Rails logs into a format that is easier to parse and read, such as JSON, which can help manage the complexity of production applications generating logs for multiple processes at the same time. Custom logging can also be added using the ActiveSupport::Logger class to further enhance the usefulness of your logs.