Training is training. Reality is reality. You can train for reality, but only reality is reality. You can also train for fantasy, which might be helpful if you live in a fantasy world.
I imagine this to be true but I've never competed full contact personally. I've been in a lot of street fights however, mostly through my psychiatric crisis intervention work. You know, I've managed to get through a lot of those just through intimidation (I do a decent Bruce Lee impression, part of my fantasy work
). I imagine that's not nearly as effective in the ring as on the street. In street fighting, there's a lot to be said for a good sucker punch or distraction (Hey, your fly is down!), which I can't imagine are quite as effective in the ring. In the ring, you know you're going to fight. You and your opponent are committed, and there's a judge that says 'go'. On the street, you never know if the fight will actually go down until it goes down. After a ton of posturing, sometimes you just both walk away. Honestly, you're better prepared for the street by learning some basic conflict resolution techniques than training your sidekick.
Don't get me wrong here. Sparring is great! Keep sparring, on every level: light, hard, whatever you can do.