Learn English – he wore horn rims with clear lenses just to look more WASP-y – what does WASPy mean

I believe this is OALD sense #4, 'by a small amount'. In this case, it suggests that Dumbledore has limited visibility of the bundle of blankets.

It could be used to mean he could only see a small part of the object due to an obstruction or, in this case more likely, that the darkness is making it harder to see.

You can also take clues from the rest of the passage and your knowledge of Dumbledore as a character. He is elderly and usually portrayed with glasses. Phrases like "he could make out a tabby cat" ('make out' implies some difficulty in discerning something) contribute to the suggestion that his sight is in some way impaired.

Beside "to or towards a lower place", down can also mean "in a direction away from you". In your context, given that he was not in a higher place, it means he looked at the road from where he was.

Here is a definition of down for the relevant meanings by Macmillan Dictionary:

down
4. in a direction away from you
    a. moving or looking along a road, track, path etc
        I was walking down the street with a couple of friends.
        James looked back down the drive to see if anyone was following him.

    b. moving or looking along a river in the same direction as the current
        We sailed down the Yellow River towards the open sea.

    c. at a point somewhere on a road, path etc in a direction away from you
        They live somewhere down Park Avenue.
        100 yards/2 miles etc down something:
        The nearest hotel is five or six miles down the main road.

    d. at a point further along a river in the direction of the current
        There's another bridge further down the river.