Very interesting. I always thought of medieval Europe as being a place of incredible snobbery, where nobles desperately hid any peasant ancestry. Why do you think Bohemian and Polish royalty emphasized their commoner roots?
Medieval Europe covers a long time & a lot of land, it was certainly not a uniform period.
That said, if your mental image is what I think it's like, that's more of a Early Modern/Modern thing, but even that, pop culture like to massively overblow.
But, generally most of the middle ages was more "contractual." Snobbery did certainly exist though, don't get me wrong.
A more medieval analogy, but in modern words, of the philosophy they would have used would be that of a 3-legged stool. (How closely this analogy matches the historical reality is another discussion. This is about their interpretation.)
The 3-legged stool analogy even covers why lords & the Church should have the extravagant decorations, etc.
A lord who shows off how beautiful his castle is, is going to have more money to fund his army.
The Church is using the arts to display the beauty & power of God as close as is possible in our imperfect world.