There was really no chance that Susan wouldn't use the "keep her figure under control" potions, but that is why Thomas Edison invented fantasy panels and the like.
In Fable 2, it would be unrealistic to quickly max out like this via potions. I imagine one could do so eventually, but they'd have to be at a point in the game at which the really top tier potions were being sold, and they'd also need a ridiculous amount of gold to buy them all.
THAT SAID, it's completely realistic to do the majority of leveling just with potions. It's only the maxing out that's hyperbole.
As for what Susan says about friendly fire, that was accurate, though one could still cause property damage by accident without the friendly fire option being on.
I'm of two minds about friendly fire being something you can toggle. On the one hand, if the player harms a friendly, it was most likely deliberate, making it an evil act in a game that intends to keep track of such things. On the other hand, with great power comes great responsibility, and maybe a super powerful magic hero should have to be careful around the people they're trying to protect.
If you agree with that other hand, then Fallout 3 once again beat Fable in execution. If a friendly NPC is in danger and you want to save them, best watch your aim and weapon choice in that game.