The frame of a car does act as ground. The negative terminal of the battery is connected to the frame of the car. It's been done this way for a hundred years. It's very convenient as ground is always available no matter where you are in the car.
It's not harmful, because if you do happen to touch hot and ground at the same time you feel 12 volts.....you feel essentially nothing unless you are soaking wet maybe.
All potential hots come from a fuse block as well. So in the case of a dead short....you simply get a blown fuse rather than a bunch of wiring on fire.