It is a very interesting question. I am sure that all published fashion images are touched up since everyone has their imperfections (some more than others!). There are lots of interesting videos on You Tube that demonstrate the transformation of what can be done.
I think, if an image in its roots or base is a photograph it can normally be classed as photography. If it is heavily worked on then it is more digital art. I had a look at the Tiny Dancer photograph, and I would say it is still a photography because thats the first thing I would identify it as, but with obvious tweaking.
I have to say, when I studied photography, Photoshop was new and exciting for all the students and there were some pretty awful OTT photoshop jobs - suddenly everyone had bright green eyes, that kind of thing! I think on a job, keep it simple, make the photograph as good as it can be, then see the digital has some kind of fairy sprinkling on top, but not as a fix-it-all for bad photographs!