Good stuff. Been there, got tee-shirt, recognize all situations mentioned (including the fight).
I especially agree with point that gaps between songs are to be avoided.
Having said that in my duo situation we don't use a set list as such, however by the end of a song we will have decided what the mext one will be so we can start promptly and not suffer from the 5 seconds of death. As there are only the two of us we can get away with this approach.
By contrast I also gig with a 5 piece band for which a set list is essential. You've got no chance making a decision about the next song when there are 5 people involved, most of them too busy being noisy to cope with having to think! Regrettably even with a set list the gaps are excessive (and drive me mad) but I'm working on that.
Of course if we play a song and it bombs then we may not hurtle blindly into our usual next somg but may take the opportunity to engage with the audience in some way just to get a feel for the sort of things they like. This can be especially useful if you have a small audience in a more initimate environment.
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John Allcock