Primarily, I see the Fate system as allowing a lot of cool things for the players; of me saying Yes as much as possible when a player wants something (and explaining why the game will be better for the group when I say No when that's required). Am I reading something that isn't there?
I would have to agree with your point that yes, Fate does allow you to say "yes" to your party more often. You aren't misreading something there.
Now, to this other co-GM/player, I'd point out the difference between the Rules As Written (i.e. the Seelie Accords) and the Spirit of the Rules (White Council stuff). If you go in as-written, you are just focusing on blocks of texts and restraining yourself because the system
can't cover everything, especially since, as you thoughtfully mentioned, what we see in the game consists of what Harry and the Alphas have seen.
Besides, if you take a look at most of the margins and sidebars, you'll see that they offer
possibilities for things that haven't been directly encountered or explained yet. For example, we've seen Kincaid for what he truly is, but we don't know
what that is yet. Does this mean we can't put him in the game? What about Mouse? We don't have a Scion template, but instead notes and guidelines on how to make it instead of the hard and fast rules.
Long story short: I think you have a better grip on the spirit of the rules, but there is still the Golden Rule of Gaming: Have Fun. If you and the players aren't having fun, then why are you playing?
And it seems like everyone else beat me to the comments field, but I think the point still stands. Go crazy on adding things that are fitting to the Dresdenverse, and enjoy yourself.