NJfred,
Nice post, and one I really agree with. I think that matching the hatch with the right fly is a very productive way to fish. As far as size stage color etc. ( I try to focus primarily on color, size, and silouhette) those are all very important things when imitating the insects that the trout are feeding on. However, I do not believe that it is crucial to be spot on exact in your representation of the natural. A little bit of variation is helpful when trying to convince a smart trout to take your fly out of the crowd. So I add little twists in my patterns. As far as stage goes that is a very important part of matching the hatch. I can remember times where in the early stages of a iso hatch there were a lot of emergers and even more duns on the water. But the larger fish keyed in on the emergers only, they woulden't touch a dun. One other key is fly behavior. It may not come into play too much where there is a very large amount of bugs drifting through a riffle but it largely comes into play when fishing flatter water with less bugs on the water. The fish can see the fly coming and how it behaves can sometimes be the deciding factor between a take or a refusal. So in my opinion matching the hatch is important because espcially on pressured fish like you said the fish won't just eat anything even when they are rising very steadily. Imitating the insect closely is critical.
Though I really love to fish dries and find it the most exciting way to fish, since I've learend to Euro nymph I have been focusing less on matching the hatch and searching the whole river for rising fish and more on fishing attractor type flies where the reaction strike or the strike out of curiousity are more important. But like dries, matching the right nymph for the right insect is very helpful.