So many interesting psycho-acoustic principles to be applied to achieve spatialization!
Closer sounds arrive earlier so if your ears detect something earlier to your right ear your brain will perceive that sound as coming from the right… The sound can be the same level in both ears, but a few milliseconds earlier in one or the other and it will be heard as coming from that direction. That’s the Haas or precedence effect.
The same kind of thing seems to happen with brightness, I think. Closer sounds are brighter, so a similar kind of panning feeling can be emphasized by EQ.
Filtering EQ and level are the main things that determine distance. Farther sounds are quieter and have less highs, especially. Air and interference from reflected sounds create complex filtering effects, too.
I think distant sounds are more varied in level, not less, so I use slight expansion, rather than compression, combined with level and EQ to achieve a distance effect.
Obviously some diffusion, whether with reverb or delays will make sounds seem farther away.
Real-world diffusion emanates primarily from the direction of the sound source, with delayed reflections from various surfaces in wider surroundings.
Keeping the overall mix sparse helps make the spatialization much clearer. Spatialization requires space.
I love playing with panning, delays, LRMSMSLR, and Fumana (dual alternating 8 band comb filters) in modular, and with many plug-ins in Pro Tools to achieve compelling stereo and surround sound spatializations.
Hoping to play more with ambisonics someday, until then stereo and film surround sound formats will have to do.