Pokemon is unrealistic to even the practical parts of reality.

[Tev]

Pokemon are too used in wars. Lt. Surge of the Vermilion City Gym often notes on how his Raichu saved him during "the war" by shocking his enemies into submission. This admission, along with the countless examples of Pikachu wasting Team Rocket show that Pokemon can and are used as weapons against other people and can cause serious harm.

I'm still trying to sort out ghost Pokemon though because if they show up when a Pokemon dies then aren't the really just some form of final evolution that all Pokemon eventually go through?

On that tangent, yes, Pokemon can die (at least in the show). Especially when there's no Dues ex Machina Pokemon Center around run be some pink haired Joy Clone and staffed by super-surgical Chanseys. The point has been made often enough that if Ash hadn't gotten his near-death monsters there in time then his next best bet would have been a shovel.