There is a faction in the world of writing that would advise you to avoid words that would be unfamiliar to most readers— that is, big vocabulary words. The argument usually goes something like this: when a reader encounters a word they are not familiar with it makes them stop and realize they are reading something, taking them out of the story. That is, you want the reader to be completely absorbed, forget their reading at all, and not break the “vivid and continuous dream” (John Gardner’s phrase) of the narrative.
There are a few problems with this notion. The first is that particular words carry particular meanings that often simplifying them just won’t accomplish. If I call someone “indolent” that’s different than if I just called them “lazy”. Secondly, often a word will have a meaning that isn’t covered by any other. When I say the sun’s rays were “crepuscular", I would have to get a lot more verbose to describe that effect any other way.
More importantly, big words might be entirely appropriate for a particular character or style. For a character, using erudite words might be a way for her to show off her erudition. For a story written about the upper class in the late 19th century, for example, using words common to that class and time are a way to convey the setting besides mere description. Words are the tools with which prose narrative is created, and certain tools have certain functions. This is where I think most writers should come down on the subject: you use the vocabulary appropriate for what you’re writing.
But finally and most decisively for me, I actually don’t give a fuck about disrupting some reader’s precious “vivid and continuous dream”. For me, part of the joy of reading is the awareness of the prose, awareness of the techniques and tools and conventions being used to convey a particular kind of story, and I don’t mind it—in fact really enjoy it—when, as in many post-modernist works, you have an architecture with the ducts exposed and blueprints laid bare, as it were. I like books that are fully aware of and in possession of the fact that they are book, and not some suppositional “movie” going on in your head. (If I wanted to make movies, I’d be making movies.) Far from taking me out of a story, a well chosen unfamiliar word makes me more absorbed, more aware—by forcing me to think about a word, to look it up or intuit its meaning—of the kind of effect the writer is trying to create by using it.
You might not feel this way, you may prefer your vivid and continuous dream metaphor. That’s fine. There isn’t only one way to enjoy fiction, and there’s definitely more than one way to make it.