> do pedestrians and other drivers really make "eye contact" with drivers to gauge their intention?

I certainly do - most commonly when merging into a congested lane from a side street, stopping and making eye contact helps understand if everybody is paying attention (the merger can move forward and the merged is leaving a space open for them).

Motorcyclists also have a pretty large vocabulary (I'm not sure how many of these are actually used in practice): http://www.abate-il.org/Backroads/signals.html