Presumably, standing in water without levitation would cause an infinite "do you really want to do this, cheater?" loop. There's no "do you want to put your belt back on, cheater?" or "do you want to polymorph into something that swims, cheater?"
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The other portal (The blue one?) is the entrance to another Realm, Oree's Realm, or even Earth! This, can explain how Oree gets Pepsi.
Ivan world seems to be an amalgamation of fantasy and the "real world" - Ivan states that he comes from Russia, even though he's not in the demon realm.
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Swords, sharp objects, etc, even when turned into a cloth material, or even flesh, will still cut. Don't eat that +16 Justifer of Banana Flesh just yet!
Never tried it outside of wizard mode, but turning bananas into metal will still let you eat them (yum). If you turn them into human flesh, this will be considered an evil deed. They also suck as weapons, even when made of adamant.
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Perception is also used in Dodge and Blocking.
I'm wondering - does Perception in any way affect your ability to find traps? And if it doesn't, does anything, apart from a ring of searching?