Peace Freak figured out why Safari / Lion wouldn't quit. I had to force quit to shut it down. The problem was in Databases.db ...
... went to: ~/Library >Safari and dragged the content of that whole folder to a folder on the Desktop.
(Note: the user library "~/" is hidden in Lion. So make sure to click on finder > press and hold Option > click Go on the top menu > choose library) Safari would quit normally!
So the problem was one of the files in the Safari folder. I started putting them back in one by one and restarting and found that Databases/Databases.db was the culprit....
Brilliant. PF is my hero. Heck, I didn't even know the option trick to display the hidden user Library folder. I'd been navigating to it using the Go item.
When I did this Safari next opened with roughly 1 billion windows -- everywhere. Including many full screen windows. Option-Close eliminated all but about 20 that I had to close one at a time. Some full screen, some windowed.
Now Safari quits normally.
Looks like an OS bug, probably related to the "restore on restart" "feature". That "feature" was a terrible idea when IBM tried it with OS/2. It hasn't gotten better the second tim around.
Based on past experience I bet this one doesn't get fixed until 10.3.4; these kinds of niggling bugs tend to persist. I'll get in the habit of closing all my Safari windows before I exit, and I'll exit and restart routinely.