I would think the purposes of setting the RPM a few hundred richer would mostly be to compensate for lean conditions that come from the "unloading", flying the up lines, and to compensate for loss of fuel pressure around half a tank of fuel. If you are setting it just rich enough to compensate for denser air, then you will be running too lean due to the other conditions. Right???
It's all relative. Running a few hundred RPM rich will still be at a higher output when the needle has been maximized for the denser air. It's like having a slightly larger carburetor. Denser air means more fuel can be burned.
Denser air weighs more. A/F ratios are by weight, not volume. Denser air requires more fuel to maintain the same relative A/F ratio. The 200 RPM richer setting is then adjusted from there.