I was wondering how the corals are doing as the whole story makes absolutely no sense.
If the fish look very stressed the corals should do so as well.
I'm not advocating bad water parameters but 0.5 ppm for Ammonia and Nitrate should first stress your corals, then the shrimp, and at least the fish. Overall the damsel would probably need the thenfold figures to show any reaction. (Never tried it, I repeat only hearsaying.)
As it is not the usual setup, that is fish first and then invertebrates, AND as the fish has been added very quickly to a relative small tank, my guess is that the nitrofying bacteria have been small in numbers and couldn't reproduce that fast as fish have been added. Those bacteria grow even slow in freshwater with their preferred ph figures of 7.3 and 7.6 resp (or around that) and much slower in saltwater.
If you haven't overfed the corals then the bioload must have been very small before.
Regarding the salinity it depends what instruments you used to measure it. You can easily have got a misreading.
Also want to add that water test kits can show strange values. When I recently got a problem with overfeeding in my nano reef tank normally with Ammonia/Nitrite/Nitrate all zero I measured with the Dry-tab test kits I usually use for the nano reef those figures: 0.25 / 015 / 30 ppm.
Just to confirm these figures I tested the saltwater with the API test kit I use normally for the brackish tank. This API test kit is for salt and freshwater and showed in the nano reef all zero for all, that is Ammonia/Nitrite/Nitrate. I measured in the brackish also figures diiferent from zero with that API test but presumably it is less sensitive with all three tests.
My guess is that your high figures for Ammonia and Nitrite result from the fish you added ptobably too fast to your tank.
If you corals are fine and the fish look depressed I would guess that their stress results from settling in or they may have got problems in with themselves.