After that covering-all-the-bases dissertation, Terry, your head surely must hurt and a meaningful lie down is in order.
I agree with your statement and have only recently come to terms with my once religiously-fueled, over-active imagination. Having come clean from my early-onset, faith-based Judeo-Christian fervor (I like to hyphenate), I am now capable of distinguishing between fantasy and reality. Yes, the reader avers, this account is reality based, that tale, on the other hand, is a figment of one's imagination.
IMHO, a good writer can soar with his imagination, nailing down his characterizations and setting and story line in such a way that the reader is convinced the account is a retelling of actual events.
As to empty words, well . . . [another post!]
Carry on!
CoCo