Sam I realize that I will never play the really difficult things. I could hack away at them and play them under tempo with lots of mistakes, but that is not very attractive for me. I want to play for others, either live or virtual, so I like to pick things I can play without being too ashamed of my efforts. I don't mind spending several moths on something if I really like it and I am making progress.
Yep, the trick is to find the sweet spot.
For me, I've spent the last few years with mostly pieces at or below my level. I had a lot going on with work (going up for tenure, applying to a new institution and getting tenure here, moving and getting into the new position)... so keep piano do-able helped me to be able to keep up with it all...
Now that things are calmer (ish, my job is never going to slow down...) I want to add back in some more pieces that are at or just above my level.
Again, the trick is the sweet spot.... Too hard isn't going to benefit me. Or having only challenging pieces on my practice menu. There needs to be a balance.
And like you, I want to be able to play for others, so if I were only working on things way out of my league, it wouldn't be do-able...