Occasionally. No, I don't feel less vegetarian. I'm a vegetarian because I don't want to eat dead animals, not because I object to having something to throw on the grill, or something to toss into my tacos or soup for texture and flavor.
I almost never crave meat. I crave dishes that are often made with meat. For example, I want chili, or I want lasagna. It isn't like I'm thinking "I must have ground cow right now! ANY GROUND COW WILL DO!" I think that's true of meat eaters. You will rarely find a meat eater who wants just the meat. If a meat eater wants a porterhouse, a MacDonald's burger isn't going to kill the craving.
You clearly think people who use seitan are less veg, but I disagree. I'm not a vegetarian because I want to make a huge production of being disgusted by meat. I'm a vegetarian because I actually think it's icky. That being said, you're totally correct and a lot of the fake meats are pretty foul. I can't stand the veggie cold cuts (not that I ever liked cold cuts to begin with). I don't think that the alternatives really resemble the originals in much more than shape and seasoning. The texture is different, the taste is different. I would understand thinking that it was weird for a person who didn't like meat to eat the alternative if the alternatives actually tasted like meat. However, I really don't see much resemblance. It's kind of like the difference between fresh orange juice and orange Crush. They're barely comparable.
Sorry for mistaking your buddy's thoughts for yours! :-) I think your friend is silly and seems to care more about appearance than actuality. As for fake meat being gross, you should try some seitan that is prepared traditionally. It is AMAZING! Find a vegetarian/vegan Asian place. They do it really, really well.