Can 66% DC 5V PWM signal damage 3V rated components
Even though, say, a 50% duty cycle 5V PWM signal looks like devices to be 2.5V, can that 5V signal still damage motors, LEDs, etc since its max amplitude is still 5V
Yes. PWM applies full voltage to the device for a time, then removes it for a time. Even if the average voltage is fine, the device's ratings may be exceeded during the PWM 'on' time. It might be damaged even by short spikes of over-voltage - either due to insulation breakdown, excessive current draw through critical areas ('hot spots') or misoperation (eg. latch-up). It might also be damaged by high peak temperature, or thermal stress as it heats up and cools down.
LEDs draw exponentially increasing current once a threshold is reached, so a typical White LED with nominal 3.0 V drop draws very little current at 2.5 V but many times its rating at 5 V. LED voltage drop also varies with temperature and between individual units, so some form of current stabilization is always required. If a resistor is used then it must be tailored to match the peak voltage applied.
Motors tend to smooth out current variations due to inductance of the windings, but if the PWM frequency is low relative to the LR time constant then the current variation will be large, causing vibration and increased rms current which will heat it up more. The minimum PWM frequency to get acceptably low current ripple depends on the motor's construction. Iron-cored motors usually only need about 3 kHz, but coreless motors may need 30 kHz or higher.
Another thing to bear in mind is that as PWM ratio is lowered the ratio of motor current to power supply current increases, so you may measure the supply current and think the motor is within its ratings when in fact it is overloaded. At 50% PWM the motor will be passing double the power supply current.
High peak voltage also increases commutator arcing and can break down insulation, but this is unlikely to be a problem in a 3 V brushed DC motor running from 5 V. The main reason for it being rated at 3 V is probably excessive brush bounce and arcing at higher rpm.
DC motors is a coil, when voltage connected the current rises linearly until the coil saturates. You avoid saturation by increasing the PWM frequency. With the right frequency you can drive the motor with any PWM voltage.