You’re absolutely right about the number of suggestions, of course. And it’s a good reminder that autocomplete user experience deserves its own post, which I promise to write.
As for autocomplete suggesting what’s possible vs what’s popular, that’s related to using query performance rather than just query popularity. Autocomplete should suggest good queries, not just popular ones.
But perhaps what you’re getting at is that autocomplete can be used to promote serendipitous discovery — more to create intent than express it. I’ve seen that work, but it’s a trade-off. In any case, it’s important to nail core search, including autocomplete, before using the search box to promote serendipitous discovery.