Comprehensive and Detailed Explanation:

The current WLAN setup with only two APs supporting over 300 client devices is insufficient and leads to performance degradation. Simply adding more APs without a proper design can cause co-channel interference and other issues. Upgrading Ethernet connections or increasing AP power does not address the core problem of inadequate design for high-density environments. The appropriate action is to redesign the WLAN specifically for the auditorium, considering factors such as client density, application requirements, and RF environment to ensure reliable and efficient Wi-Fi performance.