In reply to:
The actual energy loss through collisions is quite small.
This is a broad and inaccurate statement. Collisions of air molecules occurs more often with active movement in the medium, but we are not talking about collision of the nuclei directly here, but rather the interaction of their electron clouds, the fabric by which energy is transferred in sound waves.
The main "effect" of sound waves is not straight geometrics. Air molecules in a vacuum may apply to this principle.
The bottom line, volume is related directly to distance.
Speaker driver size is related to the movement of air.
Air movement and hence the sound that reaches our ears relates to each.
Bigger driver, bigger speaker and more power to push it, equals more air moved, more sound in a larger volume.
One can "fill the room" with sound.
The general principle is not complex.
