The FAR/AIM IS the pilot’s bible, more accurately it’s the OFFICIAL FAA rules and regulations and governs EVERYTHING we do as pilots. Violate one and all you hard work, time and effort (and of course money invested) can go “poof” and disappear! The thing about the FAR/AIM is it covers all flying and all operations much of which doesn’t concern us as airline pilots (PPL, instruction, other classes of aircraft, etc). Once you get to an airline you are obviously responsible to know all the material that pertains to you and the operation as an airline pilot. All airlines equip their pilots with a manual called the FOM (Flight Operations Manual). Each is unique to each airline and contains specifics regarding that airlines operation. It included everything from the companies security policies, approach minimums, and dress code. ALSO in there you’ll often find the relevant pieces of the FAR/AIM that effect that you as an airline pilot. So while you will not be tested on the FAR/AIM specifically, you will be tested on the FOM which is kind of the same thing.
Modern Level D sims are incredibly realistic right down to the visuals and yes you will do ALL your training in the sim. They are full motion (some people get sim sick) and allow you to practice things that you could not safely in the actual aircraft (my last recurrent we replicated the Air France 447 stall/crash). The first time you actually touch the controls of the real airplane you will have a load of passengers sitting behind you (which you’ll quickly forget because you’ll be so overwhelmed by the experience). They are really are amazing machines. My only critique is the flight controls are often more sensitive than the actual plane and most find the real planes easier to fly.