Yeah no sense in having an arc boss be the first foe dealt with. There will obviously need to be some small fry to be put against them. It gives Botan a chance to get some combat experience once Kurama attempts to teach her a few things about it. Maybe she might have a gift with plants, or at the very least be able to learn some sort of Spirit Gun variation. Heck, maybe she can make a Spirit Bat lol.

That makes much more sense. People see them spending a lot of time together, and at first it's just Kurama being a nice guy and trying to help her adjust to the new environment. But gossip is gossip. People began to spread some rumors about how far their relationship really goes. Botan's too fine a girl and Kurama is one of the most attractive men there--if not THE most--so to justify their time spent together, yeah, maybe it becomes a story they sell to help cover their time together. 

Haha, that would be very funny. I'd like it if there was someone so unintelligent that they legitimately didn't know it was Botan, but I don't know if there's someone dumb enough to believe that in the show. My first thought was Ogre, but I don't think he's THAT stupid.