You can have great photo realism with just the basic setup ( color normal rough etc ).
You will always run into trouble with translucency, because its more complex to compute at runtime. Glass in front of glass is very bad.
If you want to make water, the ‘single layer water’ shader mode might be good for you. If you don’t need to swim in it, but just need to look into it, its great.
As a guide, just take a look at how much the changes you make to certain materials make to the frame time ( shader complexity view is also useful ALT-8 ). If things slow down a lot, try removing nodes to see what’s causing the problem.
Material instances don’t really add to the cost, they’re just a easy way of manipulating parameters.
Material functions are just for convenience, and aren’t a way of optimizing.