How much “suspension of disbelief do you need?”

"Spooky real" is as good a descriptor as any. My observations on the subject:

• the source material plays a huge role in the sonic outcome. Thus, the audiophile curse of listening to "good" records, limiting oneself if there is music beyond the proven warhorses. Discovering one off the beaten  path is fun.
• The variables of people and system are too big to ignore. My brain doesn't have to consciously "work" to hear magic; in fact, that kind of analytical listening kills the possibility of full enjoyment.
• the "magic," such that it is, is not in my experience consistent, see source material above. A good sounding record will usually sound good on a variety of systems; a bad sounding record may sound a bit "more there" on a better system, but the system isn't going to "improve" what is baked in to the mix and master. 

Is there a measure of "realness" that is common to most audiophiles? I doubt it. Rock, which I have listened to a lot of for a long time, can be compressed, multi-tracked, and fiddled with to death to make it sound "good." There may never have been an actual performance occurring at the same time in the same room with all the instruments that are included in the final product. 

I find that simpler can often be better- small jazz combo, for example. That may be because the program material is less demanding (though it could be extremely dynamic and wide ranging in frequency). I find that some classical and large scale pieces wind up sounding too "cluttered" and don't scale properly in my room, which is large. But, it is not a concert hall. I cannot reproduce the sound of the 2,000 seat hall in the loft of my house. I can live with that. So, I guess part of it is expectations, too: hi-fi is convenient, and sometimes sparkles in ways that noisy PA systems, grungy clubs and lousy acoustics fail to deliver during a "real" live performance. 

Trying to get as close as possible to the sound of real instruments, at a volume and size that is convincing, is, to me, a worthy goal. 

Most records sound way better than the live performance.

I always reference piano sound. I have piano at home Steinway upright and can compare with recordings. Also solo piano is one of the best tests for system performance just by ear.

I don't obsess or even think about a recording sounding like an actual live performance. I only think about how great a recording might sound or possibly not so good if it is produced poorly or is just a lousy pressing job.

 I will say that some stripped down acoustic recordings could sound more like a live performance than more complex recordings.

I usually thoroughly enjoy what I am listening to because I am very happy with the sound of my system(s) and the music that I choose to listen to. 

When people who are in a band tell me that they have never heard a stereo that sounded as accurate as mine, where they are able to discern rim shots, listen to the original to better reproduce it and such, I know that I am close. As resolving as my system is, I still want a hair more. I can't say whether that will be sufficient or not because I am not yet there, but I believe that I am nearly there. Well recorded vocals that do not have instruments drowning out spatial details do render a "you are there" reproduction on my system, but then they were so engineered, because most were not recorded with a single stereo microphone. Different producers and engineers achieve different levels of realism. It's much like 18'th century scientists saying that science is akin to thinking God's thoughts after Him as they discovered different things. I hear pretty much what the engineer intended us to hear, assuming a good enough system to do so. You know when you are there when most of your recordings sound good. Subjective, sure, it's all you have after the fact. Listening fatigue is none existent for some fortunate people who's systems don't resolve differences in cables, and in the less fortunate, it drives them to attempt perfection. I am very near my idea of perfection, I am able to listen for hours now. Everyone has their own perception of sufficiency, and beating up others due to their level of sufficiency is an exercise in true ignorance and arrogance, which I was quite guilty of in the past. Now I could care less if you need a cheep 1960's hand held mono transistor radio to be content, or a billion dollar tube system that requires a room the size of a concert hall to be content. As long as you don't have to abuse others to achieve your idea of audio Nirvana I am thrilled that you are content.