From what I understand, Ragers are not aloud to use potions.

What about the pills...? Some have magical aura (but it's not noticable unless you have them identified by the guy at the Inn) and some don't. What are the general guidelines for a Villager applicant regarding the use of pills?

There are other non-magical edibles out there, but some of them give you a spell effect in your affects list. Do not use them. You can eat the high quality foods that non-magically boost morale, but that is about it.