Update for anyone watching and who might come across this in the future. Our app was approved first-try by Apple and maybe took at most an hour.
Detailed
Barring any changes to Apple's policy in the future or how they're influenced by the phase of the moon; As of the date of this answer, I'm confident in asserting the following about Apple's take on in-app purchasing:
- If you are selling digital content, you must use IAP
- If you are selling physical goods, you cannot use IAP
tl;dr
Apple's requirements, restrictions and testing of an App featuring physical purchases are no more stringent than one without.