Optimizing HT setup for Analog: Where to begin?

You got your answer for a good starting place, an integrated with home theater bypass.  And yes a decent quality integrated will sound much better than the "pure direct" on your AVR.

The amp and preamp both matter, but the preamp has more to do with letting the sound from your source get to the speakers in my opinion.  

Some other things to think about... better feet for your SL 1200 if you haven't done that already, upgrading the Puffin, and perhaps your cartridge, which you didn't mention.  The Puffin is really nice at it's price, but you will get a fuller, richer, and more dynamic sound with a better phono stage.  I use a Pass Labs XP-15 with my SL1200 MKII.  The Hana SL has been the best sounding cartridge I've tried on mine.

Soundstage will have more to do with your speakers and your room.  I haven't heard the LS50, but they are supposed to image very well.  Have you experimented with placement?  Have you done any room treatment?

Greg - on the TT setup:  I have both the AT440/OCC and Denon DL-110 cart that I swap out.  I upgraded the feet a while back too.  The puffin is interesting with it's analog -> dsp -> analog processing.  In the end though, I don't really like to fiddle with things.  My next phono stage will likely be something from bottlehead.  My quarantine project was one of their headphone amps and I'm very impress with the build quality and sound.

On the topic of placement and room treatments - I don't have many options here - the room is multipurpose.  The good thing is that it's a carpeted and fully finished basement, but I know I can do better.    

Good luck to find a good integrated amp. with HT bypass for
1500$ .

Hegel H190  , used , may be the closest priced  integrated amp. with HT bypass .
From owners manual : 
´´  HT
Most inputs can be configured to act as a Home Theater input. This will set the input volume at a fixed high volume level. ´´

Just curious - will the Phono stage in some of the integrates be better than the puffin?  Parasound P6, Peachtree Nova150/300/500, etc.  

And also, what's the difference between HT Bypass and a good 2amp/1speaker switchbox?  Aren't these functionally the same?