AGP aperture size sets how much system memory the video card can use for texture memory if it runs out of onboard memory. This is pretty rare even with a 32MB card. However many systems run into problems if it's set too low, so the recommended setting is 128MB to 256MB (about half your total memory). There will hardly ever be any problem with this, and the memory remains fully usable by your system until the video card actually requests some of it to be used.
The AGP bus is not part of the PCI bus. The northbridge includes the AGP controller, and the AGP interface is a dedicated port, with dedicated higher bandwidth than the PCI bus, and dedicated access to system memory. The PCI bus is controlled by the southbridge.
An AGP card can be made to run in PCI mode. This pretty much means none of the capabilities of AGP are used other than the higher bus speed. AGP texturing, sideband addressing and fast writes are disabled. In many cases this wouldn't even be noticeable, the higher bus speed is really what makes AGP useful (AGP texturing was originally intended to make it possible to use video cards with less memory because it was very expensive at the time).
You may be able to fix this by installing the specific drivers for your chipset. Intel's Application Accelerator drivers should be installed since they improve hard drive performance, and the INF Update Utility is used for updating all the other chipset drivers, including the AGP controller.
The primary graphics option in the BIOS should not be causing this. That setting only tells the system whether an AGP card or a PCI card should be used as the "first" monitor, which one will display the POST screens and be designated in the OS as the primary, in case you have two cards installed or have onboard AGP video and install a PCI card.
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