Right now I'm in Goldenrod City. It's about two weeks of traveling... and yes, you'll have to sleep outside when you're not in the cities. In the cities you can find inns to sleep in, but you have to pay for a room.

But your Pokemon should keep you safe while you're traveling, and if you can weaken enemy Pokemon enough, you can catch them too. There should be some red and white balls in your backpack. They look like these.

[He pulls one out to show her.]

If you throw it at a Pokemon, you can catch it and it'll fight for you. ... It sounds strange, but that's how things work here. And most don't seem to mind being on your side once they warm up to you a bit.