I agree that if the performer is having a good time it spills over, but only if the audience is included.
I attended a Gordon Lightfoot concert years ago where the performers had a great time - with each other. They often turned their backs to the audience and exchanged private jokes. The music was good but I left that one feeling kind of cheated.
Saw Cheryl Wheeler just a few weeks ago, on the other hand, and left feeling like she had been in my living room. That's the kind of experience I cherish.
I play in front of small groups in a small town where almost everyone knows me. Including the audience is never a problem since half of them usually join us!
Bruce