How cheap can you go and still be happy with the sound?

Wow.  Does this ring any bells?

Sorry to burst your bubble, but, a 11 by 12 closet is not hifi, it is about as lofi as it gets for a room. That Hegel isn’t hifi either. Hence, you’re just not a hifi guy anymore ..you are a midfi/lofi kinda guy ( and such is life).

Just don’t overthink it, get whatever li’l box, put it in the 11 by 12 closet, lower all expectations and make do with it.. If you restrict your playlist to female vocals @ 60db, everything should work fine (make you feel like you’re very hifi or something).

God bless.

(On that note, i still probably listen louder than most guys on this forum).

I would expect nothing less of you.

IMO, this would qualify as a high quality (sonically) charity price hifi rig for any younger or older person w.r.t small room nearfield or midfield listening.

I am surprised that you have not repurposed a mansion somewhere so she could use that for her listening room.

The price of your equipment bears little relationship to the sound it may produce

That has not been my experience(s).

I think you would be surprised at the incredible systems that some people can put together at a reasonable price. 

"Incredible" and "reasonable" are both relative terms.  

I’ve owned three tube amps (I still own my first one) and the best sounding I ever owned were a pair of monoblocks that could be a bit unreliable so I replaced them, but they were the amps with the highest MSRP.

I own three preamps, and each successive preamp cost more than the last one and each one had sonic characteristics that were distinctly better than the one it replaced.

YMMV, but my experience has been that every increase in sonic performance that I have ever experienced has required an increase in expenditure. To me, that does not seem all that unreasonable.