I think she's right, but she doesn't take it far enough. Most beginning writers don't observe enough, period. I think part of making fiction breathe is observing all the characters, down to the most insignificant spear carrier. I spend a lot of time watching very physical actors at work, for example, and seeing how they portray emotion both broadly and delicately. A lot of the Brits are particularly good for this--Helen Mirren, for example, can put the viewer into a character's head without ever changing her expression. It's all body language.
The prevalent American acting style currently seems to be more about emoting, and less about something that I think I heard attributed to Robert DeNiro (It may have been Al Pacino, come to think of it), that the secret to acting is to remember that real people don't try to show their emotions. They try to hide them, and fail.
I think that's also an effective technique to remember when writing: real people try to hide their emotions, and fail.
And I don't think a writer can rely on being able to characterize only the POV character in any given scene. Because if I can't characterize the people who he's acting against, I wind up with what I refer to as "The A-Team Problem," where you have one fabulously realized character actor performing against a bunch of people who might as well have been scenery. (Okay, Dirk Benedict wasn't actually all that bad. But he's no Dwight Schultz, if you know what I mean?)
The more I learn about writing, the more I realize that it's effective to borrow terminology from all sorts of other fields of artistic endeavor. White space, for example, is vital. If the eye recognizes an outline, the brain will fill in the details. But the outline has to be sharp. Case in point, Picasso's le derriére femme or whatever the hell that sketch is called. (I can't find an image online, dammit, or I would link it.) It's three india ink lines, and it's a very elegant sketch of a partial female nude.
These is a major problem in a lot of fanfic I'ver read, and also in a lot of slush. Failure to maintain a POV is a sin NOT because omniscient POV is a sin, but because writers do it to avoid having to learn how to characterize from an external POV. They're not *looking* at their characters, and in not looking at them, they're not grounding them. It's so much easier--and so much less effective--to just hop into the other guy's head and tell us what he's feeling... instead of showing it.
I first heard the term "On the nose dialogue" from James Stevens-Arce: characters confessing easily and openly to emotions, even ones that most people generally wouldn't talk about. Characters saying exactly what they mean instead of coming at it obliquely, the way real people usually do. Dialogue without subtext. I think again it comes down to observation, and the writer's ability to write in actualities--fabulous reality--instead of symbols.
A writer has to achieve that observed actuality to make a character come alive, and we all (or almost all) start off writing in symbols. Just as almost all of us start drawing and writing with symbols--so much green scribbling on a brown stick is a tree, and a girl with a heart-shaped face and flowing raven tresses is pretty. Observing the thing that's unusual or different is, well, half the battle, I think.
Getting that observation on the page is the other half.
Of course, in writing, there always seems to be another half. But, you know. Like Bond, we take it where we can get it. *g*