I had this exact problem in Windows 7 64 bit. The issue was the Windows generic driver. It read the H4n as a microphone and there was no way to switch it and have Windows see it was line level. The solution is to download the driver from Zoom and it will show up and work fine.
https://www.zoom-na.com/products/field-video-recording/field-recording/zoom-h4n-handy-recorder#downloads