We've been through this before, I thought..
Without a sense of danger-to-life, and without actually feeling the G-forces at work, a videogame player can drive in a way that no real-life driver ever would. Hence, the faster times.
And, as mentioned above, there's no telling what sort of modifications were made to that car.. a Stage 4 Turbo and super-soft tires could very much give you a much quicker lap than a stock M3 on Sim tires, which would probably yield a fairly accurate lap time.
As has been mentioned many, many times before.
As for whether F1 cars can race on the 'Ring.. it all depends on their suspension setup. They used to race there, as mentioned above. And, again, there are no consequences to bottoming the car out, which, again, gives the game player a lot more freedom than a real race driver would have.
Unless you think that PGR has a more realistic rendition of laptimes on the 'Ring?