There are plenty of things the phrase 'might' mean, like I said, it seems to leave just enough space to allow you to wriggle out of blatant absurdities. But I haven't heard a interpretation which fits in with them being real women which sounds in any way satisfying.

As for which is the bigger leap, I genuinely do think they're both about even. We already know TC is capable of producing landscapes and images based on peoples thoughts and emotions, and so it's hardly a big leap to think that Ulty's will could push TC into spawning actual beings (especially given that Ulty could create GF's in a flash even without TC). And then just look at how we first encounter them: the first one appears as Edea in the Commencement Room, but when you enter the battle she's turned into someone looking entirely different, as if she morphed right there and then. Doesn't seem that real to me!