Of course.
Nope, it sadly does happen. And they can tell the difference.
There is no doubt in my mind you can tell the difference and do see real-world parallels.
What would be the point of storytelling indeed? Thanos wipes out half of humanity - hopefully you feel for those that are lost. Hopefully, poor teenage Spidey gets the viewer to be sad.
But, there is also another side. Escapism. One that watches Legolas and Gimili hack through orcs and feel nothing for them. One that watches Black Panther and Captain America kill all those demon-dogs and not feel a thing. One that watches Lethal Weapon and watches Riggs be a cowboy cop and shoot all those bad guys, and again, feel blank or maybe even cheer.
That is why I feel there is a disconnect in your argument. You don't seem to be able to believe both sides can exist. You can make players feel for characters in a story. You can also make them feel nothing. All within the same campaign.
I guess the question is do you believe both sides can exist within the same story? Or is it always some layer of grey, that hinges of one definition of violence, one that must be attached to real-world characteristics?