Using this picture to demonstrate:
Notice the blurry text blends together and is not separated well. Each letter is less distinct and if it were a sound, something even less precise, it would be difficult to tell exactly where it was to begin with. The clear letters at the bottom are exactly the same positions, but are separated better. The stage is merely the original word without any blurring. It's shape and position is determined by the original recording and the electronics and transducers between the original recording and your ears.
Think of a line of musicians standing on stage playing towards you. You hear them distinctly because you are in direct line of sight of their sound. Turn them facing away from you and the sound becomes diffuse and much more difficult to locate where one instrument stops and one begins. This is the same concept.
Edited by Maxvla - 2/1/12 at 12:47am