Well, musicologists have different views on the origin on plucked string instruments and their relation to the guitar. Here is an interesting overview:
http://www.guyguitars.com/eng/handbook/ ... story.html
The lute may come from the oud but the guitar is often placed differently. Of course, lute and guitar are different instruments and as all instruments have idiomatic virtues and limitations.
Anent the lute:
“The quickly fading sound of the lute did not lend itself to polyphonic voice-leading and called for specific techniques that compensated for the technical limitations of the instrument. The ‘broken style’ of lute music, a most ingenious and consistent application of such a technique, may be called the glorification of the simplest lute figure: the arpeggio....” Bukofzer, Music in the Baroque Era, op.cit.,p. 165. Much ornament, etc. to compensate.
The perception of “Bright” can relate to how the guitar is made, strings, technique, A:440, etc. Today in Baroque guitar performance A:415 is often used and I would think that is also the case with the lute thus less bright perception.
Many great musicians have shown that good taste, discernment, and creativity can indicate Bach or Bachian pieces appropriate for transcribing and arranging for the modern classical guitar. We can consider Karl Scheit or Ragossnig, for example.
Although this thread is on Bach, there is a vast array of untapped Baroque music by other composers out there.