Yes and yes, but I'd argue against the point I suspect you are trying to make.
Vulnerable just means he can be hurt through his invulnerability, if whatever is attacking him would be powerful enough to harm his yellow-sun powered physiology. Shazam, for example, can hurt him, but can't no-sell him just because he is fuled by magic. Same for Diana. A fireball will hurt in so much as it burns him and leaves an impact mark, but only that, even if it would have incinerated a normal person.
We have no indication that Silent Hill does power scaling. I mean, the worse it's ever conjured is whatever Maria turned into, abstract daddy, and Pyramid Head (who is Bane tier strength going by the sword and skin-ripping from the movie). I don't believe for a second that peoples pysches coulnt' be used to make something much bigger and far nastier, but it's always fairly tame (from a super-powered cpe point of view).
My point of view of course. I just don't see the town making hellscape copies of Zod or Doomsday. Nor do I see the knifes wielded by whatever nurse stand in he gets penetrating his skin, or even that of Pyramid head, as not being invulnerable doesn't make them kryptonite. (It might be able to do that, though, have kyptonite scattered around the otherworld.)