The argument that fiction gets closer to the truth than reality is older than the proverbial hills. Mark Twain, I believe, said much the same thing as your bolded quote. I would make too much of the quote as an indictment of Professor Benedict.
Sorry, your defense of Benedict stinks.
First, she is teaching a journalism course.....telling journalists that fiction gets closer to the truth is how we have media outlets like The NY Times, CNN and MSNBC.
Second, her proud proclamation brings her non-fiction works into question.