Whilst it would make it more realistic I'd agree with Raze that the need to eat / drink / sleep would be a chore. It is just a game after all. The DK never goes to the toilet either; how many games do you see where you have to take a dump?
Dumping is every bit of important as eating or you will explode and that will be nasty!
The reason why there is no fall damage is a game mechanic; if they put that in there would be problems with the dragon. It could be explained away in the game as like Raze suggested, levitation spells. Think it was mentioned somewhere this will be rectified in the sequel.
Flirting - your character definitley could do with engaging in conversations more and it would be more 'fun' in that particular scene but where do you want this to lead? It could lead to DA style sex and / or sexual remarks but then it would have to be an adult game. It would be one way to bring back the dragon knights though. Heh...
As for horses, yeah, I'd go with that but Dragons are much more fun!
