
This is one of those 'shows up every month' topics, but it's a valid question.
The simplest way to put it IMO is that a bad bass player will sound bad on anything, and a good bass player will sound good on anything. However, a good bass player with a very high quality 'tool' (as you put it) will not only sound better tone wise, but many times will be able to focus more on 'creating and making music' than 'making a mediocre instrument sound good'.
Does that mean that paying a bunch extra for wooden knobs and multilaminate exotic body woods has anything to do with anything? Of course not. But a simple, high quality instrument with the ability to take a great set-up and produce even tone and nice sustain through its entire range can really be a wonderful thing!