Seems to me either goal is simply unreachable. And that most systems can even approach either goal in one or two areas. So we're down to "picking our poison", deciding for ourselves what is most important to the individual.
A small system can do a creditable job of reproducing reasonably accurate timbers, but will not play loud, have bass or dynamic power and will present a small soundstage. Bigger systems can create larger sound with extended height illusions, play loud and go deep but it seems the bigger they are the harder getting the actual "sounds of the instruments" right seems to be.
While I would not set up measurements as the be-all end-all, it is interesting to note in reviews where measurements are present how even a small relatively inexpensive speaker can measure pretty flat, but large systems almost always have very significant frequency response anomalies.
And in practice, I have heard many high$ high end systems that were very impressive but didn't seem to reproduce instumental timbers as well as my little pair of LS3/5A monitors. And I have a problem personally spending BIG bucks for a speaker that in some areas can be outdone by a much less expensive or involved system. I have focused mostly on speakers here, but the other components do add to the fun!
So where does that leave us? We go to concerts to listen live and try to get a system that gives the "gestalt" of music to each of us, all using his own criteria of what aspects of live sound most trigger our pleasure response. Hopefully. I have heard many audiophiles brag thet their system was so good and revealing that they could only listen to 10% of their recordings with pleasure! I am not sure what the fun is in that, but hey, whatever!