The 500 ft rule is there to stop us pissing people off on the ground. Not for our safety. If there is clear air at 300ft and cloud at 500 I know where I am going to be. If I am at 300ft I will be landing if safe. This does not infringe rule 5. The 500 ft rule is about socially acceptable flying. Dont die because of it. Bear in mind that if you are at 500 ft but in cloud you are still breaking the law, a different law, and putting yourself at great risk.
In an ideal world we would all fly in CAVOK but life just isnt like that.
I also think that the 5 hours instrument appreciation is worthwhile. If you really end up in the !!!! then at least you have a chance of getting out of it. Its not ideal training for IMC but its better than none.