On the manual it says that the Shred Files and Folders window show the fastest algorithm on the left of the shortcut menu and the most secure algorithm on the right, does it mean that the US Army AR380-19 algorithm is the most secure even it uses only 3 passes versus other 7-pass algorithms or even the Peter Gutmann's algorithm which uses 35 passes of overwriting?? In general, how would the algorithms be sorted according to their security levels??

It is hard to say which is most secure. There are plenty of standards out there and different countries are using different standards.
In US the DoD is most famous and in Europe the european standard is the english HMG standard.
The File Shredder is supporting all these different algorithms.

In the HMG standard you have 1 pass up to Secret level and 3 passes up to Top Secret.

On todays harddrives there are no real reason to run the Gutman of 35 passes. This was used in the old days when the harddrive tacks where wide as your driveway and a harddrive contained 1%% of today's size.
Still it is quite famous and people know about it. I assume it is why it is supported.