My wife has that bike. She uses flat Azonic 420 pedals and 5-10s. No one has tried to place her under arrest.

Many 2-bolt SPD mountain shoes are identical to road bike shoes, except for the cleat mount holes and some rubber on the underside. (My Shimano M088 comes to mind.) Pretty much any 2-bolt SPD shoe will be walkable, at least to some degree.