Okay, Mark probably know I am audioholic enough to answer some of your questions hopefully more clearly this time.
Your Veritas - The graphs do show some elevated output from 8 Khz and up but if you run Audyssey correctly you probably won't feel the brightness. Other than that those Veritas should be as transparent as most speakers in that price range. If you prefer something more mellow you may try the KEF R series, I think the R500 is in the same price bracket as your Veritas.
Bass bloat - That's a tough one due to your room's geometry, X32 is good but can't do the impossible. You also mentioned the room is 12X12 (feet?) but how high? I think the room may be too small for your 18" Velo, you may want to chat with SVS or PSA and get their recommendations on a sub more suitable to your room and your taste.
4520/8801 - I own a 8801 and I agree the 4520 is a much better deal and more intelligent choice. If you can get one brand new for 1K it really is a no brainer.
Your power requirements - Again, I am quite sure with your volume set at -20 your amp won't be outputting any more than 0.5W per channel (L/R only) on average. Dynamic peaks will swing it to say 8W frequently and probably 50 to 60W occasionally if you listen to classical music. As you said yourself, how can a 200W amp help if you won't come close to calling for that kind of output.
Why people need 200W? - Many people do and many needs much more such as 1,000W or even more. There are many reasons, such as the following:
1) Speakers with low sensitivity, such as 83 dB/1W/1M vs the Veritas that seems to be rated 93.5 dB/1W/1M. Every 3dB difference would equate to double the power, so if you need 100W, the person who owns speakers with 83 dB sensitivity would need a little over 1,000W, everything else being equal.
2) Speakers with low nominal impedance such as 6 ohms and below with dips to even lower - You already know the math on this.
3) They have larger rooms and sit further away - For every doubling in distance, you lose 6 dB. Now there is room gain to offset that 6 dB loss but a larger room will have less room gain than a smaller room.
4) They listen at much louder spl than you - I think you are probably used to and happy with 75 dB average (me too), with peaks to say 85 to 100 dB depending on the media content. Those guys who need huge power amps such as the EMO XPR monoblocks probably listen to average spl of 85 dB regularly.
5) More power is better whether you need it or not, so even for people like me who could easily get away with 50W amps, I won't go for anything less than 200W except for the surround channels that I am fine with my 140WPC power amp; and I suspect a lot of people prefer to have more power on hand regardless of their real needs.
Again, there are many reasons and they don't have to be rational for audiophiles or even just normal audioholics like us, YMMV.
