The only person who ever thought an Xbox running Windows and Office was "cool" was Bill Gates, and thankfully his version of the Xbox was killed in favor of what we got.
That would be a win for everyone. A Windows VM accessible via quick resume would be fantastic. There are literally no downsides and would increase the value of the platform. It allows Xbox console owners to play PC games such as Spider-Man etc. on Xbox. Microsoft has to encourage console sales. There is more they could do but this would be a major step in the right direction.
No, it's 100% real. From way back. But as I said, it's MS marketing department being on crack. We can argue about Xbox branding across generations (which is a whole another topic), but as a more recent example, the official MS marketing said transferring songs wirelessly between Zunes is "squirting". I guess they didn't google it.