There are definitely more physically accurate ways to render soft shadows, but AFAIK they all involve some kind of bounce lighting where light bounces off of objects in the scene and indirectly lights other parts of it.
This looks great when combined with area light sources, like you suggest, but in my experience it's too slow for interactive demos.
This looks great when combined with area light sources, like you suggest, but in my experience it's too slow for interactive demos.
I'd love to be proven wrong on this :)