Color fringing artifacts are often helpful by providing smoother blending between colors. This especially helps when the display is an NTSC TV where Amiga "low res" pixels are already half the size of a TV color clock.
So to be able to display photos in HAM mode you have to convert them first, don’t you? Basically, you would have to select a strategic base color for each line and then modify that in a certain way to approximate the original real color information? Sounds tricky and hard to generalize.
Correct; they made programs whose main purpose was to convert 24-bit (or otherwise) images into HAM (or other modes) for display. The Art Department Professional comes to mind, which was a holistic image processing tool (rather than a paint program). It could do a lot of other things as well but this was one of the major things it was used for. It was also one of the first applications that I felt the need to upgrade my RAM (from 1MB) for (IT BEGINS).
you didn't touch upon fringing, artifacting which can happen if you're trying to get to a color that's not so trivial to get to. Good image conversion tools like The Art Department Pro took pains to try to avoid this, of course, but it could still very easily happen anyway.
I didn't. and am trying to think of the best way to explain this, as so many miss the fundamental reason this happens. I tried to address it obliquely by showing how the "colorful" demo in the RKM deals with it: it always does an explicit modify of all three color components, which cuts horizontal resolution, but guarantees the color can be reached.