Ghouls existed back then too, but they were rarer and if I remember correctly they (along with all mutations) are caused by a combination of radiation damage and FEV released into the atmosphere during the Great War. The Forced Evolutionary Virus and giant insects certainly don't fit into real world physics, this is where 'SCIENCE!' comes in, but radiation alone seems to function much the same in the Fallout world's lore as it does in ours.
As for Radaway, I'm not sure how it's supposed to work from a scientific standpoint. It's basically just meant to be the Cure Poison potion of the Fallout world, so I don't think we're supposed to think about it (and Black Isle probably didn't think too hard about it themselves). That's a good question though.
Ah. I hadn't thought about the F.E.V., I thought that was only released after the Great War. I suppose that could explain the mutations in the watseland, though I was sure ghouls came from exposure to radiation. oh well.
I don't know why but the lack of glass in the Fallout universe bugs me. Nuclear bombs release a massive heat and pressure wave, this can turn sand into glass. It seems like with all the bombs that detonated in the Fallout universe there should be whole fields that are nothing but glass. I know it wouldn't happen for every detonation (soil compistion and proximity to the bomb would play key roles in that) but it seemes like we should see something. I don't know if that's just an asthetic thing, or an oversight, or they just want to put it in. either way it still bugs me.
@ Ace Hanlon: That seems more like a gameplay mechanic. The game wouldn't be as much fun if I died every time someone whot me. Or if I had to spend the rest of the game on crutches becuase a mine blew my leg off.