Jimjoyce25, again I have to agree with every point you make. You are right of course. There is a difference between a string quartet playing at home or one playing full tilt boogie in the concert hall. I am well accustomed with both and players will adapt their volume to the acoustics of a given venue. So probably, when our facsimiles give us the impression of sounding "real", it is not so much loudness or SPL, but the reproduction of dynamic swings between pppp and fff (I purposely leave out the fourth f) which mimic the real thing well enough to give us the illusion of "reality". This and the palpability of the players and their instruments within the soundstage our rig is able to create.
It is, as MrTennis rightly says, also a question of "timbre and quality of sound", but above all, I tend to think that it is the proper reproduction of the dynamic swings in a given composition from barely audible to loud, within a range that does not offend our ears in our listening venue, which gives us the illusion of "reality".
It is, as MrTennis rightly says, also a question of "timbre and quality of sound", but above all, I tend to think that it is the proper reproduction of the dynamic swings in a given composition from barely audible to loud, within a range that does not offend our ears in our listening venue, which gives us the illusion of "reality".