Great thread with many articulate and well thought-out, inspiring responses.
I always thought of lo-fi as a sort of movement of indie-type artists, back when indie meant "independent" and not "marketing," that resulted in a kind of aesthetic sound, and including less overdubs.
And because they/we had no money, they/we used non-recording industry standard, (i.e, cheap) equipment, studios, mastering, etc.
Now I consider it a sound, and while Frank Black records live to two track his stuff is not lo-fi, but I'd say Paul Westerberg has that sound, that aesthetic.
Incidentally, listening to the first Tom Petty record by Denny Cordell this morning, well, it sounded kind of lo-fi to me, often kind of like an 8-track in the basement.
Basement, bar; to me lo-fi as a sound sounds like an 8-track recording with sometimes brilliant compromises in arrangement, even mixing, but something where the art transcends the medium, where maybe murk and hiss, even though unavoidable, are acceptable.
Incidentally, the Grifters were one of my favorite all time bands, and as great as Crappin' was, I think with the more polished Possession they came into their own. Of course, then they broke up!
Anyway, I would have suggested different vocal mic's, but as those are evidentially not the problem, and as long as I'm making a fool of me, the two-buss compression concept mentioned above, maybe with more room mic, and less or stupid compression on the drums, no or "low-quality" reverbs, and liberal use of the LPF's and HPF'z...
And lots of beer or jug wine for the vibe.