Seeing as you are being paid by someone wanting your work I think the question about retouching should be posed, just ask when setting up your shoot. You can ask if they want retouching done and if they ask "like what?" then have a standard list you offer, like whitening teeth, enhancing hair color, removing wrinkles, etc. I might do a little post processing without concern but would not change physical appearances without pre-approval. That said, I think you are both somewhat right. :-)