Too many days of staring at "steelhead green" has totally killed my confidence in sight fishing. After developing fundamentals in the typical clear water, spot and stalk trout game I more or less gave that up entirely to pursue salmon and steelhead.
In recent years it seems the two worlds have started coming back together on some ways. Paying attention to the factors FF02 describes above and trying to appeal to the more trouty instincts of these fish in low and clear conditions can really open some doors in conditions that for me at least used to seem hopeless if not frustrating.
That having been said, when I can see a steelhead, I lose most if not all confidence. Why? Maybe because my experience hasn't strongly correlated being able to see them and catching them. Much of that is probably due to patience, or lack thereof.
Regarding the unfelt take, I have seen it too and let me tell you it was food for thought! I can see how some might develop the practice of "setting the hook" on every little tick as a result. Personally I usually wait and pull back when pulled upon and I am sure I miss fish because of it.
Interesting point about not remembering what the take felt like when you have the chance to see it. In the realm of sensory prioritization, sight often trumps "feeling" at least with regard to memory. Feeling (pain especially) usually takes precedence in the immediate action required category as that sense usually doesn't allow time for processing. I know exactly what you mean though. I can't recall any memorable battles where I have watched fish eat my gear, but I sure remember what it looked like.
If sight fishing gets your blood boiling, visit New Zealand. Probably the best in class for spotting and stalking big trout.
As for steelhead, images like this will continue to haunt me and erode my confidence. How many do you count?
Image courtesy of Suskeena lodge.