Does Entertainment Need To Be "Realistic"?

No. But the characters really need to have some credibility and some motivation, unless it's explained that a character or two is a sort of McGuffin, or something unexplained, like the Blob or the Thing (the attempts to explain them fall flat. The Blob in origin, the Thing in motivation, but that's okay, because they are more McGufflin than character, and no attempt is made to make them "characters".)

When writers, producers, directors, try to con us with vain attempts at motivation and character, that's when it can't be entertaining any more. It would be better to just show scenery with no characters than to do that nonsense. 

But the events don't have to be realistic. Almost none of the entertaining science fiction has anything resembling realism. We know James Mason and Pat Boone and a big Norse guy with a duck can't just walk to the center of the Earth through caves, without encountering high pressure, molten metal, gas, and dense rock. But the characters have motivation and are credible.

And the Hollywood notion that if you're totally devoted to sadistic evil, you are immortal (all horror movie icons like Freddy, Jason, Hannibal, spaghetti Western leads, modern movie mobsters, etc.) can't be entertainment to anyone who isn't either a homicidal maniac or the most naive bubble boy. There, you lack realism and entertainment both.