Your first "kit lens" turned into a "kid lens" which propbably isn't really wrong. ;)

Mea cupla -- typo fixed with thanks!

“f-stops use a logarithmic scale” is a complex way to explain a much simpler principle: The size of the aperture is given as a fraction of the focal length. For a 50mm lens at f/2, the diameter of the aperture is 25mm.

Can you please comment about options to power the camera when used as a webcam? Do you use battery? Or plug it into a power outlet? Any concerns around heating if kept on all the time plugged in to power?

How you power a camera will depend heavily on the camera: broadly speaking more modern cameras are easier to work with. Older cameras tend to need a "dummy battery". In contrast, my X-S10 needs a normal battery in for it to work but, with USB-C power, seems to barely drain it at all (certainly it can be used all day without any obvious impact on the battery). Some other cameras I believe don't need a battery left in at all and can work solely off USB-C.

Thanks a lot for your full explanation! I'm bookmarking this for later on, when I'll have this spare amount to put in a video setup. I discovered previous year that, to my surprise, pre-2020 cameras were not designed to be used as webcams and had to buy a C920 while having a clean camera at home...

Also, the cheapest way to improve an visio setup is a correct audio installation, with a good enough mic and a soundcard. ~200€ gives you something correct, and is a huge step-up when doing visio (got a entry/mid level mic + id4 Audient soundcard, it does wonders).

For people starting from computer cam + headphones, I'd recommend upgrading audio first (cheapest, biggest felt quality improvements for others), then upgrading the video setup as explained here.

should check out getlumina.com

I have the Logitech C922. The Logitech control panel lets zoom in to eliminate the wide field and much of the distracting background. There's also some white balance control which can probably eliminate some of the lighting complaints you have.

Having said that, there's no arguing that a better sensor and a wider aperture lens that gives a shallower depth of field yields more pleasing results.

The problem is, I hardly know anyone who's willing to pay almost $1000 to achieve such results.

Nice writeup! I would be very interested in seeing where using a smartphone with a decent camera stacks up. I'm using an iphone 12 pro with EpocCam (https://www.elgato.com/en/epoccam) which seems to work very well, just need to boot up the app on the phone and be on the same wifi and you're good to go - no cables required.