Pretty obvious by reading your post.
Anyway, the K701 is not better to a good extent than K550, they're in the same league in terms of overall sound resolution, refinement, etc. In fact if someone gave both to me, and I didn't know about them before, I'd say K550 are the more expensive headphones.
They're extremely similar (much more similar than certain frequency response graphs might suggest), when I first got my K550's the first thing that fell on my mind was "closed K701". And it really does sound almost identical.
What K550 does much better is build quality, isolation and comfort. Where its slightly better and its noticeable on some music is slightly more bass extension and low bass (<60hz) presence. Mids are I'd say identical on both, typical AKG mids, and highs might be a tiny bit more forward on K701's, but K550's have a spike around 10k which makes them sound "sharper". Anyway, to me, its like basically the same headphone, but one tunes for audiophiles (K701) and other tuned for studio with its slightly more analytical and flat sound, and good isolation.