In the sim, an error, minus play or plus play is calculated after the out/ hit determination, so yes, just like in real life defense does matter. However I strongly believes it matters less that in real life.
In real life BABIP falls within a relatively narrow range for most pitchers. A pitcher that allows a lot of ball in play will generally allow lots of hits. In the sim, a K is calculated after an out, so BABIP is meaningless and K rates have little effect. It is true that in the sim, low K pitchers have more errors and minus play behind them, but this is offset by getting a greater number of double plays.
In real life a great range player might be worth an extra out every-other game over an average fielder. In the sim, even under ideal conditions it is tough to get more than 40 plus plays and under nominal conditions you should expect less that 30 plus plays. Basically this means in the sim, infield fielding percentage (except for first base) is way more important than range. No player year exemplifies this better than 1989 Howard Johnson at shortstop. He is a fire hydrant with a glove, but as long as he is well rested, he will never make an error. In the sim, these affects basically cancel each other and he is probably close to average defensively.