I am guessing it's time to simply get to the meat of this fantasy of mine: that of electronically enlarging the size of the room. I am assuming we all understand the why of it, and now let's go to the how of it. I want to state up front that I have never tried this, I only envision how this will work and as many of you have pointed out, to make it work properly is a major challenge - both physically and technically.
First though, let's review and think about what it means to have a larger room. Imagine yourself standing in a room with 5 other people talking and chatting it up. The room is 10x10 feet and with your eyes opened or closed you can sense the size of the room. You sense this because of how your voice feeds back into your ears. You hear how your voice and movements interact with the surrounding walls. This has everything to do with the wall's surfaces and proximity.
What I didn't tell you is that in our imaginary room, the walls can be moved. As you are chatting it up with the other folks, I have people behind the walls that pull them apart, expanding the room size to 20x20, effectively doubling the size. You would immediately know you are in a larger room because the time it takes your voice, and the voices of your mates to reach the walls and bounce back would be doubled. That's how you know the size of the room. Same for the ceiling - if I were to pull the ceiling up you'd know that as well.
Therefore, in theory, all I need to do is place 4 very flat wall loudspeakers - one against each of the 4 walls in our room - and internal to those loudspeakers is a microphone and some circuitry to make the microphones and speakers work. The microphones would "hear" your voice and movements and send a duplicate signal back to you at the same volume level and timing as would a wall reflection. If you did this, you wouldn't really know anything was happening - your ear hearing what it was expecting to hear from a surface 10 feet away.
To expand the size of the room I now need only to delay the output of my wall mounted loudspeakers, playing back what the microphones pickup, the appropriate time difference you would normally get when the walls moved twice the distance from where you stood. Done properly, your ears would not hear anything different than if the actual physical event happened. In a darkened room, you would swear the walls had moved - because every auditory sense you have is giving you the correct cues for exactly that to happen.
If you move your head, move closer to one wall and further from the other wall, the effect would be identical to what would happen should you actually move the wall.
If you change the volume level of the "reflected" sound you effectively control the nature of the wall's reflectivity. So in this one system you can both control the size of the room as well as what the walls are made of. One could then program the system to track the recordings you play - add the approximate size and nature of each room to the metadata of your tracks and when you play something that was recorded in Carnegie Hall, the room changes to simulate that size - a cozy nightclub, a large outdoor concert, a deadened recording studio, etc. Let your imagination run wild.
Tomorrow let's sum up all that we've spoken of, go over why any of this might matter and then move on.