Security – Are SPVs and fraud prevention viable options for Bitcoin scaling?

I know this may be taboo to discuss because of the potential implications (unlimited block size), but in an attempt to put ego issues aside in the block size wars, I’d like to hear from people/developers who: I have a deeper understanding of the Bitcoin system than I currently have, whether it is technically possible to use SPVs and proof-of-fraud to scale Bitcoin.

Having an unlimited supply of block space makes some sense to me from an economic perspective (the potential for greater decentralization of miners and the services they will provide). Needless to say, it would be nice if everyone could afford to self-manage some of their Bitcoin. I don’t think any of that matters unless it’s a real option from a security standpoint.

Is it a necessary aspect of system security for everyone (or as many individuals as possible) to have the ability to verify every transaction that has been and will be broadcast? Is it impossible for individuals to use SPV and Merkle proofs to only track their own UTXOs and rely on fraudulent proofs from miners who are incentivized to keep the chain honest by tracking active chain tips? Can a system remain secure if users only verify transactions relevant to them?

Excuse me if there’s something obvious I can’t see here. It just sticks out from the top of my head. I would appreciate it if you could provide a technical answer/discussion or a link to read a more detailed explanation of the obstacles to this extension method. thank you!