Interesting question and one I struggle with too.
I’m another who starts out looking for something mid-priced but decent and then gradually talk myself into the top-spec, super-duper model with the go-faster doohickey and the Unicorn horn inlays.
In reality, I think that (assuming that the amp is at least reasonable) below a certain quality level the guitar is the limiting factor. At the very top level, you’re mainly paying for finish and decoration which have either a limited impact on tone or are so subtle that you need a much better amplifier/cabinet to hear them.
Somewhere between those two is the Goldilocks point where the instrument has decent pickups, bridge, but, etc and is put together properly. After that point, I’d start looking at upgrading to a better amp and speaker combo…