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RAW would seem to dictate that all models need to be within the 2D6x2 inches.

I disagree.

If any portion of the unit is withing the spotting distance, the unit is within spotting distance. Granted, that means that it's quite possible that not all of the members of the unit can shoot the harlies (if those members aren't within the spotting distance), but the ones that are can certainly shoot them.

That's how it's going to get played, but the wording of "unit wishing to target" and "if the models aren't within spotting range, they may not fire" does IMO mean that if some are outside, no one can fire.

You choose a unit that wishes to fire at the Harlies, then roll. Any model of that unit that is within the range can fire on the harlies. 
At least that's how I'd interpret the use of "unit" and "model" in the rules.

To me it seems to be slightly better than the way I thought it would have been played. I thought that if the unit successfully spotted by rolling at least the distance between the two closest models in LOS of each other, then the whole unit can fire at the whole unit of harlies. But the way it's written, it appears that the unit rolls for spotting, and any model in the unit that can spot the closest harlie can shoot, and kill any harlie in range, if they are too far away they can't shoot.

I play that you roll for spoting then any harlie with in the distance of the enamy unit fireing at the can be killed.

ie if there are 10 maires fireing at them 12" away and the roll for VoT is 14" and there are 3 harlies with in 14" then those 3 can be killed. Even if there are 5 unsave wounds

The rule is crystal clear. You roll for spotting distance and that's how far each model in the firing unit can be from the harlies in order to fire.

Again, If an individual model is in range of any harlies, it may shoot.

Then, when it shoots, casualties are pulled anywhere from withing the range of the gun.

Veil of Tears does nothing to change the range of the gun shooting. It only affects if the unit may be selected as a target and if the gun is fired in the first place.

So if a unit of marines with bolters that stood still rolls 14", and all of the marines are within 14" of one of the harlies, then they all shoot and casualties are pulled out to 24", as that is the range of the bolters.