The stereo output does contain surround information for most games using the Pro Logic system as OP says. The Denon should do a reasonable job with the signal. However, it is a rather basic system that has been around since surround was put on VHS video tape! Not in the same league as xbox 360 & PS3 Dolby Digital offerings.
Actually this isn't entirely accurate.
VHS was using Dolby Pro Logic Surroud as a decoder. Basically that's a 4.0 signal with Right, Left, a center channel and one surround channel (with limited frequency-range). The extra channels are encoded in the stereo 2.0 signal.
The games on the Wii and gamecube are encoded with DPL 2 (some with DPL 2x). A completely deferent encoder to the original DPL Surround!!
Regardless of the encoder used on a Wii game (DPL 2 or DPL 2x) you will get the following results:
A DPL 2 decoder will output a 5.1 full-range (20hz-20khz) signal.
A DPL 2x will output a 7.1 (full-range) signal.
(Right,Left ,Center,Right Surround, Left Surround, Back Surround Right, Back Surround Left)
A DPL 2z decoder will output a 9.1 signal (same as the above, with 2 Surround Hight Channels)
Finally if your receiver is really expensive and has Audyssey DSX you can get up to 11.2 (adding 2 Wide Surround Channels and a 2nd Sub with different signal sent to it.)
In other words if someone has a dolby digital encoded signal (most games on xbox and PS3 are 5.1 - some 7.1) and a receiver with no additional decoding capabilities, he will get a 5.1 or 7.1 output.
If someone on the other hand has a Wii with a receiver that supports
DPL 2x,DPL 2z or DSX he will get 7.1, 9.1 or 11.2 channels.
Of course the above decoders (although they can extract up to 11.2ch from stereo 2.0) will do a greater job with a better signal. So the Plus on the Xbox and PS3 is that the signal is digital and discrete compared to the analog matrix encoded on the Wii. That means the decoders will create an even bigger sound stage with a greater, clearer surround effect (if your room / speakers allow it)