My thoughts...
As a 6'2" driver coming out of a BMW 328, I felt like I needed the seat all-the-way back and all-the-way down to get comfortable.
I went out to my Sport today and experimented with the height adjustment and telescoping wheel to give you some feedback.
If you have the height up halfway, I can understand that you lose some visability at traffic lights. And since the 4Runner has 'shallow' visibility to start with, you may need to lower the seat. I think you'll have the same problem with any SUV, though.
And, IMO the armrest position does feel 'low' with the seat halfway in height. That would be another reason (for me) to lower the seat.
My steering wheel is telescoped almost all the way out. I am not sure how that compares to the SR5 position, but I'm glad I could get the SW closer to me.
As far as the XREAS, mostly everyone on the board agree it is great. To be honest, XREAS is incredible. Since I was used to a BMW (with Sport package suspension) I thought the 4Runner would feel 'top-heavy' and 'sloppy'. Let's say I was happily surprised. For an SUV, the 4Runner is on 'rails' - at least compared to my '99 Grand Cherokee.
As far as the seat, it takes some getting used to. For your next test drive, I would try the seat 'lower.' Give it a chance, and if you're like me, you will quickly get used to it and feel right at home in the seat.
Final thought...get the Sport and avoid "Hood scoop-envy."
Best of Luck,
Chris