I started to address some of your arguments and formulating rebuttles, but it felt like I was missing something. Then I realized that I wasn't discussing what might well be the most important of all of the integrations that relate to values and moral principles: the part they play in a creature whose nature is such that they are both emotional and rational.
We aren't just reasoning creatures, we are also emotional. This is both a fantastically good thing (potentially) because who would want to live as an unfeeling robot? (That question is suspect given that "want" is itself a thing with an emotional side.) But being both a reasoning and an emotional creature can also be tragic. When a person attempts to substitute emotion for reason, or to repress emotions - they are taking paths leading to bad places.
I mention this because the fuel that motivates us is emotions. If some switch could be thrown that would completely eliminate emotions from a person, they could no more get out of bed in the morning than the engine in a car could start without any gasoline. Even when we aren't focused on, or aware of an emotion that is fueling us... it is there. That is our nature.
When we watch a movie or read a novel, our emotional reaction is an automated response to subconsciously held values. Values are the primary area where emotions and belief join. Primary values are integrations of what we hold as important moral facts, ie, beliefs that have become deeply imbued with emotions. It is how evolution, our human nature, our individual learning and our choices program us - or more accurately, how we program ourselves (conciously or subconsciously).
Say that we like a protagonist in a novel because his actions tell us that he is courageously honest; it is because that virtue is more than just a pragmatically judged consequence that is beneficial. No, it is a value we have taken deep into our being and integrated it till we respond to it emotionally. Our personality, our sense of life, and our likes and dislikes will all be formed out of the complex integrations and interrelationships of the values we have taken in - consiously and subconsciously - to such a depth - that they become these underlying structures of who we are. And needless to say, these things will share in directing us, just as surely as they define how we experience the world around us. When we talk about having a hierarchy of moral values we need to stay cognizant of the fact that the importance isn't just about the hierachical order of the values in terms of the degree of conceptual abstraction, or in the ranking in order of logically derived importance, but that they are alive in the heart of our being and ordered much more in terms of their motivational intensity.
There is far more to moral principle than just a statement of consequences. We are partisans in this life where what we value matters and it gets attached to our very soul as emotions. They are the measure of how much it matters... experientially.
And all the time our subconscious judges our actions and their results and these are part of the mix that generates our on-going feeling states. But here is the most important aspect of all of this: There are virtues and vices in how we choose to use our consciousness that are automatic and soley responsible for our self-esteem. If we judge each consequence's relation to our benefit, and do so on the fly, but without having that strong principle that is a reasoned generalization, then we will benefit our self-esteem by living consciously and responsibly (if we are honest with our self about the consequence), but it will not have the intensity of a judgment that is coming from a core virtue. Nor would a novel or a movie ever have the same intensity to lift up a person who reduces the part played by their moral principles (none of this is to say that virtues should be held blindly, or in opposition to reason, or through denial or rationalization or avoidance, nor should they be used to create a world of psuedo-righteousness which is just another psychological escape from reality). We choose our moral principles. They guide us in understanding possible consequences. Reason and choice allow us to correct and adjust those principles when needed. Then our service to the principles we've chosen, and that we maintain, rewards us - but service isn't as accurately descriptive as saying we live by asserting our values.
If a man's life is seen as a novel, then the day to day decisons will be his unfolding story-line, and the novel's theme is held in the moral principles that guided those decisions. The complexity, and the reality of human life is a reciprocal relationship between our story-line and our theme. We must join the two as a kind of integration of the immediate concretes that we face by asserting our theme on them. Too often our virtues are seen as rules we follow. And as Objectivists we have virtues that logically support our life as rational egoists. But that grossly understates the purpose of a virtue. It is one of the direct connections to our self-esteem - which is so crucial to living well, to succeeding, and to happiness itself.
We act in a virtous fashion, not just because it is right for us - as in our best interests practically - but because it empowers us when our acts arise out of a tight correspondance with our belief as to how man ought to act. Pragmatic decisions are often needed (eg.,"What shirt should I on this morning?") but they are without much charge or power. They direct actions, but they don't imbue those actions so as to generate a sense of power and well-being in ourselves. The passionate pursuit of a life lived with intensity requires this tight binding of principle to action - it is the primary role of principles in judgment (with the understanding that the principle has been correctly formulated and understood and that its application to the facts of the immediate context are logical).