Well I'll be damned
After watching the youtube video I posted (the first few minutes) I was able to get win11 up and running pretty fast and simple
Some points to remember off the top of my head:
1. Try to look for recent information instead of relying on older guides which may be outdated and cause you heartache. Some of the pages I was looking at make you do extra probably incorrect steps. This youtube video by "nmariusp", a KDE Plasma developer, went through pretty simple steps to get up and running.
2. In virt-manager itself, just remember to pick "VIRTIO" option for whatever you can, like I did for STORAGE/DISK, NETWORK and VIDEO instead of the defaults SCSI, e1000e and QXL respectively. Enable OpenGL 3D option in both the VIDEO and CONSOLE/SPICE/VNC options.
edit: Remember to edit the TPM settings to choose version 2.0 and type "TIS" and not the default other one whatever that was.
3. Mount the "VIRTIO-WIN11.ISO" image you download off the Redhat website as a STORAGE->CDROM->SATA device so that it is visible during Windows install.
4. During installation when you don't see a disk to install to, click "Load Drivers" and browse to the CDROM drive in previous step and pick the top level "amd64/w11" folder and it will install the disk driver for VIRTIO so you can proceed to install the OS but do the following before actually starting the install:
5. Again click LOAD DRIVER and browse to "NetKVM/w11/amd64" to install the networking driver so that you can connect your account to the setup (can be avoided) and later have working internet.
6. Again click LOAD DRIVER and choose some folder named similar to "VIRT-GPU-DOD" (look for "gpu" in the name) again w11/amd64 subfolder to install the video driver which allows up to 2650x1600 resolution for me at least.
7. Now start the installation and proceed till you first login to your Win11 desktop account where you can browse to the mounted VIRTIO ISO drive and run the "virt-tools-installer" (or similar named exe) which will install the "guest tools" it seems.
ENJOY!
So this is looking very promising for me to switch full time to linux as daily driver, and that too with current Ubuntu LTS 22.04.3 which now has newer kernel 6.2 even better.
Thanks folks for your inputs in this thread.
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First thing I tried was a YT video playback in the VM in Edge browser, seems pretty smooth and audio working nicely. But the win11 desktop UI itself is not completely smooth, will look up further how to improve, maybe requires GPU passthru/sharing if I can do it with my older RX 580.