1) Based on the above quote does it mean that if the speakers are Harsh / matigas if you set the YPAO Equalization to Natural, the sound will become less harsh / malambing?
2) Aside from Yamaha, are there other brands of AVRS that offer the same three(3) EQ options after calibration?
1) Yes, harshness of upper midrange and high frequencies is slightly reduced. But remember that the reduction is slight, which means that you will benefit if your room and system are already good, and will only need slight equalization to make your system sound better.
Therefore, you should not buy receivers and speakers without planning for correct matching, then expect equalization to solve every mismatch. Auto Parametric Equalization (PEQ) has its limitations, so you should try to work within those limitations.
Accoridng to sir Timithekid, auto PEQ is very useful, but if speakers are mismatched with receivers to start with, you will still notice those mismatches during peak volumes despite prior auto PEQ.
That is why the best approach is to first make sure that your room acoustics are good enough, then do your best to match receiver with speaker. With that aside, use auto PEQ, and your system will sound good.
2) As far is I know, only Yamaha's YPAO has the Flat, Natural and Front selections after auto calibration.