You don't have to follow any of this advice. Just know that if you don't, your wireless network is trivially easy to crack by anyone with the right applications.
How scary is that? I would say for the average person running a wireless network at home this usually means that someone might either try to just see if they could do it or try to steal your Internet connection. If they are going after your Internet connection, maybe they are doing so just because they are cheap but probably because they want to do something that is illegal. In terms of the common reasons for cracking a wireless network, probably the worst cases would be someone downloading child porn over your Internet connection and the FBI comes and confiscates all your devices on which files can be stored or coordinates a terrorist attack and then you have DHS breaking down your door. I imagine in both those worst-case scenarios you would eventually be absolved of all wrongdoing, but there certainly would be embarrassment and short-term life disruption. And even if you were innocent, the damage could be long-term: how many employers would hire you after the HR screener finds a local news article about you via a Google search saying that you were arrested for allegedly downloading child porn or participating in the planning of a foiled (or worse: realized) terrorist plot?
Less likely - but still a possibility - would be a direct attack on devices in your LAN to retrieve potentially sensitive data or to make it part of a botnet. Note that not sharing anything via SMB to Everyone* is just one part of that. Attackers could use any number of known vulnerabilities in Windows, other operating systems, or system or application services running on a networked device to attack host machines and devices to gain access regardless of whether or not anything is shared. Sometimes its just a matter of sending a malformed packet to a certain port that has a service listing on it that has a known vulnerability to such packets.
How likely is any of this to happen to the average individual at home? Such statistics are impossible to know but I would say there is safety in numbers and it is probably not very likely to happen to any one person. But there is still a risk.
Also, controlling DHCP is not a comprehensive security mechanism. What about people that use a static IP? I know that if I successfully hacked into someone else's home or small office wireless network that is the first thing I would do. Even if I show up as having a leased address the first time I gain entry, the chances that the someone at the average household or small office is checking the DHCP logs every few days are almost non-existent and my lease will simply expire and I won't show up there anymore. So while checking DHCP logs regularly is a good security practice in general, it 1) only helps you discover potential breaches after-the-fact and 2) it doesn't really show you all computers that might be associated in a wireless network.
I am in charge of our Nessus security scans at work, and its actually pretty scary how many vulnerabilities there can be in a network and how many new ones pop up all the time. We had a server that had over 140 individual high-risk or critical vulnerabilities at one point and many of them could be remotely exploited and would result in total control of the machine if exploited. Honestly you could go crazy with this security vulnerability stuff. But you should shoot for the low-hanging fruit at least: close obvious security holes that can be easily changed via settings, upgrade device firmware, and patch your operating system(s) and applications regularly. For the average home network, it really isn't all that difficult to do these things. It's just a matter of education and time, and maybe some money in certain cases. Like everything else with computer and network security, the first step is to get educated on the risks, the second step is to evaluate the risks in the context of your environment, the third step is to decide how much risk you are willing to accept, and the fourth step take the appropriate measures based on the decisions. For me, I certainly don't want to leave my door unlocked and find out the hard way.
I know the education is the hard part for most people, because you don't know what you don't know until someone tells you, you stumble upon it on your own, or you actively seek knowledge in an area. And that's exactly why I took just a little bit of time out of my day to put this thread out here. Unless you haven't bought any wireless devices since 2004, these things are all really easy to do, you just have to know about them first. Well... I concede that if a bunch of your kids' stuff can't connect to the wireless network, that can be kind of a pain to hear about all the time. The really tech-savvy ones might even go in and undo these changes if you don't make it hard for people to get into the admin interface.
As far as comments about specific devices, you don't have to throw your Wii away, just don't connect it to the wireless network (do you even use the wireless functionality?). I'll have to go back and correct some of the stuff to make it more clear in that sense (Edit: Just checked and I already said an option is to not use them, but I added "on the wireless network" for clarity). But if your mom has a router that doesn't even support WPA2 + AES, yes it is time for that thing to go.
* It is safe to have SMB shares on an up-to-date Windows or Linux system. Just use appropriate permissions to lock the shares down.
