I agree that it is much easier to engage audiences when they are under the scrutiny of a singer with eyes open. Also, when I am in audience I prefer a singer to look at those to whom s/he is singing.This is why I try to sing 'eyes open' much of the time.Speaking from a singer's point of view, I lose a lot of the wonders of a song myself if I can't visualise it in my internal eye. Like others who have already contributed to this thread , I 'see' the action as in a movie - even down to the dress and setting of the characters in the song. When I sing with my eyes open, much of that goes in the distraction of looking at the audience.
So who do I please - myself or the audience?
Usually I try to please the audience, but when it is a song which requires complex emotional interpretation, I will keep my eyes closed to get the best out of the song -both for myself and for the audience.
Mary Humphreys