I'm an audiophile rookie, but I think what sounds great (after having gone to the local hi-shop and hearing some stellar gear) is "definition" of certain instruments and "separation" in the context of hearing those instruments in a band recording. I was able to hear albums I've known my whole life with improved quality, thus a great experience. Case and point- hearing a few albums I know very well with different cans made me experience the album differently. Thus, I bought the Sennheiser HD800's, as I felt it made my listening experience great! I didn't know what I was missing, in other words.
Generally great sound is what's appropriate for an individual's personal preferences, because there's so much variation between this I don't think there can be any one definition. Myself like bright, transparent detailed music, vivid clarity ,revealing vocals, and that's just covering how I prefer my mid-range, Mr Joe Blogs however, may completely dislike it to him its not great sound.
How much "better" something sounds is based off of how much more expensive it was than the last bit of gear it replaced. Twice the price makes it twice as good by default.
Both of those terms are so subjective. I suppose that for music to increase in quality it would be closer to the mastered recording. Beyond that its just tweaking subtleties that may appeal more to certain listeners.
for fidelity notions, it's the signal that is objectively closer to the original, whatever that original is. and some will disagree on that reference, or about which objective variable is the most significant. for example if a system has better frequency response(closer to the target response) but a little more distortions than another system, which has the better sound? hard to tell.
for matters of personal opinion, everything goes and nothing matters but to the one having that opinion. so I can't imagine making a clear rule or definition on this.
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