The problem with your definition is that it do not apply 99% of the music we hear. Live classical is an infinitely small market segment.Apparently one generally accepted definition of High Fidelity is "recreating exactly what the engineers heard" (assuming the engineers used excellent speakers in an excellent studio). Is that approximately the definition you have in mind?
Let me propose an alternative definition: High Fidelity is "creating a credible illusion, both timbrally and spatially, of hearing a live performance." In other words, Fidelity to the experience one would have at the performance (even if it never actually occurred), rather than Fidelity to the experience of the engineer.
So let me ask you a loaded question, which relates to competing definitions of "High Fidelity": How do you feel about using upmixing to surround channels to add delayed reverb to the sound? This being a considerably more extreme approach than my passive multi-directional loudspeaker topology.
Your last question is exactly what happens when you listen to 5.1 TV broadcast on a stereo system. Most of the time even on many DVDA releases the 5.1 track is down-mixed to stereo instead of a using the separate stereo track.