I didn't watch the extra-time, but in the German media the general opinion is that the penalty was very soft and the referee who was asked to German tv said he would not have given it and seemed a bit surprised the VAR didn't intervene.
That being said I like the English players (as players, not as people...) better and therefor I'm not that bitter they got through. There are so many people always preferring the "fighters", I prefer the "artists".
In general there were many games which were really close in this EC. So many extra-times, penalties, and even if the match was decided in regular time it was often quite close, that was a positive. Also, in general, the refereeing wasn't bad, VAR didn't play that big a role, the decisions came fast, and there were quite some goals through open play, those really were positives. I didn't get really invested, though, part of it may have come from the all-over-Europe approach which was nonetheless restricted to a few countries and together with corona never gave me a real EC feeling - I usually only watched parts of the matches or didn't watch at all (so my resumée doesn't really have much worth

).
It has been much better tournament, than last Euros . Lot of play-off games have been surprisingly open, high-tempo affairs and despite occasionaly too lenient officiating, cynical play hasn't really managed to dominate as it did five years ago. Standard of play has been quite high despite unusually long season and many injuries. There's been lot of drama, some nice comebacks from seemingly hopeless situations, but also heartbreak and sense of injustice.
Refereeing in general could have been better, but it's been, apart from couple of games and one particular referee, far from disastrous. The failure of the tournament has been Felix Brych, who in addition to the scandalous Belgium-Portugal game made glaring mistakes in most of the other games he was in charge of. Mostly those mistakes were failures to call clear and obvious fouls. I don't really know whether he genuinely didn't see those incidents or was too obsessed with avoiding giving soft fouls.
The other game that stood out for poor refereeing was Italy-Austria. It didn't have any outstanding single errors that everybody would talk about for days afterwards, but Anthony Taylors line of officiating was so wildly inconsistent, it really stood out in negative way. It almost felt like he was overwhelmed by the occasion, which really shouldn't be the case for someone who can regularily get some of the biggest games in the Premier League. Having said that, the refereeing standard in the Premier League is far behind the playing standard.
I fully agree with you on preferring artistry over grunt in football, at least when it comes to top level football. That's actually the reason I'm finding the constant crying and hypocritical howling about soft looking fouls so disgusting. The game is about so much more than just running, jumping and wrestling, yet going by what is often going on in football forums, social and tradional football related media, fans and journalists all too often act like they would like to relegate it to just that.
When it comes to the lack of festival atmosphere that usually accompanies such major tournaments, then I actually believe that even without Covid restrictions, diluting the tournament all over the continent would have killed off most of it. For the fans of those teams who cannot play several games at the same city, the travelling would take up much greater amount of time than it would if the tournament is more concentrated geographically. Also even if there are several games in one city, lets say London, then the rest of the country still misses out on the party as opposed to a normal tournament held in several cities all over the country.
As for the final, I'm rooting for Italy. The way they have played has mostly been genuinely enjoyable, an international football equivalent of club sides like Atalanta or a Napoli from few years ago. England, while not exactly popular with neutrals due to several reasons, is in my eyes a clear favourite for the win. Form wise they're peaking at the right time (during group stage, they were still going through the motions and did no more than needed), but in the play-offs they have come to life. Very strong defence and lot of attacking weapons should give them advantage.
The are couple of banana skins too. Expectations and pressure that comes with them will be enourmous and England as a team doesn't have the best of reputations in delivering under pressure. The other thing might be Southgates ability to manage the game and use substitutions optimally . Against Denmark he waited until extra time with his substitutions instead of bringing on fresh legs to press home the advantage they had against visibly tiring Danes before the end of normal time. He had the chance to do five substitutions in normal time, and if I remember correctly, he did just one. Not exactly a sign of a confident, assured game management. He reminds me of Solskjaer in that aspect a bit.