The battery setting is _only_ used for the runtime estimate, based on measurements. If Rockbox tells you to get 20h this is an estimate, and if you set your battery capacity to something that doesn't match your battery this will be completely wrong. Also, if your battery is olr (or, like in my case, a cheap replacement) it's possible that this value is also wrong.
You won't ever get longer playback by simply increasing the battery capacity setting.