In fact, metallic lithium (which the safety features in lithium batteries are designed to specifically prevent the formation of, as uncontrolled growth of metal insice a battery cell is a sure way to short it out over time) is far more combustible than ethanol is, as it spontaneously combusts on contact with such common substances as water or air. We use high-purity methanol for a variety of purposes at the present time, mostly in industrial chemistry, but also as a vehicle fuel. The risks are quite manageable. In practice, it wouldn't be much more flammable than isopropyl alcohol, and I've got a perfectly safe bottle of that at 50% strength on the table beside my computer. It's pretty much the ideal solvent for cleaning LCD displays. I've bought it in purity up to 91%, and the main risk from that was inhaling to much of the fumes from it. And the only reason we're talking about methanol instead of ethanol for this purpose is how nuts governments are about ethanol.
Of course it's flammable, it's an alkali metal. The reactivity with water and atmosphere is a property common to all alkali metals.