First of all, a comment about the instrument and mirror blur...
If you are racing at 130+mph, you are an IDIOT if you are looking at anything BUT the track. Sure, in a video game, there are no tragic consequences if you do, but IRL, in a twisty course, with cars all around you, you don't look at your instrument cluster AT ALL. The blurring, as far as I am concerned, replicates the out of focus effect you get IRL if you keep your eyes focused on the road in front of you and you are picking up the cluster in your peripheral vision. Looked at that way, it becomes VERY accurate.
Mirror blur is obvious. Even your POS sedan, in race conditions at race speeds, will be vibration blurred. You seem to forget that the vast majority of race courses are not paved buttery smooth like an autobahn.
Head shake and body movement? To a large degree, that's simply a sliding scale. With immobility and unreality at one end, and flopping around like you would without a four point harness cinched up TIGHT, and a standard over the shoulder seatbelt at the other. But, IMO, the goal of a racing GAME is immersion. Until we can all afford five display 3D cockpits with motor actuated seats (like fighter pilot training cockpits in the military), some aspect of the physical experience of racing a car is going to be missing.
At this point, you have to ask yourself how you get it back..? Do you exaggerate the physical effects, to trick the brain into feeling something not there, or do you ignore it, and let the brain just do without? Personally, I am at the more visceral end of the sliding scale, but don't ANYONE assume that any particular solution is realistic. At least not until you have that $1M fully motorized NASA simulator! So, let's dial back the rhetoric a bit, eh?
For me, although cockpit views are cool, I still believe that without a 3-5 monitor setup (fat chance on my salary!) they are unrealistically restrictive. I am disappointed I have seen virtually NO full replays in Shift's REAL 'Hood Cam', which was my preferred view in Shift 1. It completely DESTROYS GT5's version (that everyone misnames 'bumper-cam') as it shows the hood, but uses the whole width of your TV as the virtual windshield. The most efficient use of your TV's real estate, without losing where the corners of your car are. And you still get a decent amount of immersion, as the hood 'shakes' and vibrates around, unlike GT5's 'invisible car' cam which, AFAIK, simulates absolutely NOTHING from real life.
As to the sounds, once again, a sliding scale. And, once again, I would prefer the overly exciting to the under exciting. GT5's car sounds are, with a few notable (but rare) exceptions, too tame and mild. The FIRST thing you do to any racing car is strip out all the sound insulation, seats, padding, any pound you can find. This makes them INCREDIBLY noisy inside. Bright, not dull. This is what might fool a GT5 fan that things are exaggerated. I guess, if you are using earplugs, you take them out and suddenly everything sounds exaggerated. But it isn't. It's just you, finally finding out what things REALLY sound like.
Personally, if I want the experience of racing with earplugs in and a helmet on, I'd rather start with the real sound, and PUT earplugs in, than not need them but NEVER get the real true snarl.
I had the great pleasure of standing right next to the Jaguar XK13 at Sebring last year when it got started up and driven off. I nearly jumped out of my skin, and I DID have my earplugs in! I'm truly sorry, GT5 fans, but you have been robbed! And many of you don't even know it.
I don't CARE if it's a bit exaggerated, I would rather have THAT experience in a game, than the muffled, loopy (can't remember hearing a single loop in Shift), phase-y (ditto), milquetoast 'experience' you are so proud to 'defend'.