I think the call for realism is more of a call for a context for mechanics that feels cohesive with the tone and story of the game. If you think of something like, say, Geometry Wars--everything is just shapes and explosions with absolutely no contextualization happening and there's no reason to complain about realism, but if the designers started saying "you have to do this to save your psychic, warrior-pilot brother and the purple diamonds are masters of space-defense and every time you die your brain degenerates to re-fuel your body" suddenly the mechanics don't match that contextualization and you have a conflict in narrative and mechanics and you start missing on players' expectations of how the game should react to their input.

I think nobody expects to forget they're playing a game, but they call for realism so often because games are usually modeled somewhat after the real world, so there's the expectation of output vs. input that comes from the usual response in similar games, but also from their real-world and just logical expectations, so how they assume the game will react based on their input is mismatched in terms of how they want to develop strategies and play the game and also in terms of a conflict between tone/narrative and mechanics that can diminish a good marriage between system and story.

As for bullet sponge bosses: I agree that time spent with the boss can make the moment feel more impactful, but only when the boss uses that time to breathe and develop. If it's 10 minutes of the same thing, it's tedious. If it's ten minutes of changing resource availability and new attacks and defenses, it becomes an event, but I think when a boss nails being "an event", usually people aren't complaining.