Actually, no, your supposed to turn your amp up. Reason being is it drives your power section and drives your speakers at which point your speakers begin to excurse which is when the speakers begin to move back and forth in sympathy to your playing. This is also when cabinet involvement becomes part of the equation too. You also wanna listen at that point because wtf is the point of sticking your ear next to a speaker to listen to the speakers sound when it's just gonna change when you turn it up?
As for the mid scoop, it's not just that it sounds "mushy", it's that a guitar by nature is a midrange instrument so you need those mids in your guitar tone if you plan on getting the tone into a mix and getting it to fit. The reason your not supposed to listen 10 ft. away is because at that distance, the room becomes part of the tone. Also, mics hear things differently than we do thanks to bone cavitation. Bone cavitation is basically the way the bones in our body/head affect vibrations (sound) due to our body's resonant frequency. Everything in the universe has it's own resonant frequency based on size... depending on an objects size it will resonate with certain frequencies better than others. An example of this is a wine glass... the myth about glass shattering due to excessive SPL levels is true, you just have to find the resonant frequency of the glass, amplify that frequency and the glass will start vibrating in sympathy. When there is too much vibration the glass will shatter
That's because distortion is compression, When you bring the distortion of your amp down you bring back transients of the guitar signal which gives you a clearer, and more articulate overdrive/distortion sound. Which is also why when you crank the gain on a high gain amp, everything starts to blend to together and sound like a big fizzy mess.
You should also apply compression to a clean sound so that it get's a little closer transient wise to the distorted or overdrive signal which can help them gel together a little better.
Gain staging. Your preamp should boost your signal to line level, nothing more and nothing less unless you notice that there is either a better signal to noise ratio by boosting or cutting, or to achieve a certain sound characteristic of the preamp.