I use 'making out' as a blanket term for 'sexual activity' all the time. If I say "and then they made out" to describe a scene, I mean anything from kisses to explicit sex.
Also, it's not Michelle that says making out. It's Peter, and he doesn't know what happened. Michelle says 'start swapping spit with me on the kitchen floor-' and she doesn't finish the sentence. She has something more to say, or it would have been a full stop. Clearly, something must have happened, be it sex or a conversation, because making out and then wandering off without a word would be really odd. Maybe she was going to say 'we swapped spit, and then you presented me with your boxer shorts as a token of affection.' Maybe 'we swapped spit, and then had penetrative PIV sex'.