1. Yes.
2. Yes, it does.
And as for documentation, you can forgedaboudit. It takes quite a mentally deranged person to allow you to have only one save game slot (accompanied with standard Eastern European saved-game corruption ratios) whilst placing the adjustment for the insanely horrendous default difficulty settings in the one place you wouldn't look - your friggin' inventory screen!
Nb: You can't access your inventory if there are boogies in the vicinity. Brilliant.
Let's be serious now. Just because they mention "boobies" doesn't suddenly mean the game's destined for greatness!
It all depends of the quality of said boobies. Are we restricted to side-boob cleavage or does the nipple intend to make an appearance? Further, will there be ample opportunity to showcase the 360's latest boobie jiggles per second capabilities?