There's a difference between having masses of muscles like Schwartzanegger (Um... Arnold. heh) and having muscles. Muscles arent required, but if you're going to lift heavy swords you have to be strong, and you have to have muscles. Especially for weapons like broadswords, which tear more than they cut. And if you're going to fight with your fists and legs, you need muscles. Martial arts work to a point, with techniques and whatnot, but the stronger you are in normal fist fighting, the more damage you're going to do. I can tell you that from all the fist fighting I've seen and been involved in.

And you cant really tell Lulu's body type. Her manner of dress hides most everything... the bell sleeves and the bell shape of her skirt keep the player from seeing anything. She could be a twig under there, no one knows.