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I always read it as spell level, not caster level, and I don't see any reason why you can't use MM feats (though I only have experience with spell-storing weapons and armor). As long as the spell level isn't higher than 3 (adjusting for MM feats, of course), you should be fine.
That said, if you're using rods for the MM feats, you should still consider the total level of the spell with the feats included. So, if you enhance a 3rd-level spell with a MM rod, it shouldn't fit into the weapon or armor.
(Also, I assume you're talking about 1e?)