I think a good measure of somebody's language ability is if they are confident and proficient at interpreting. And without the two people slowing down too much. Translating, to me, isn't nearly as hard as interpreting because you have time to do it! Of course, to translate *well* would be pretty hard.

Understanding by context can help you get the general idea but there are times when you really have to understand every thing they say.

Native Speaker speaking fast: So...I'm going to take the car and then come back at around 6:30PM, maybe 7PM. But friend A has the apartment key so you have to be back here by 6:30PM at the latest. What do you think?

In this situation it is important that you know that you have to be at the house at 6:30PM; the native speaker changed their mind from the original 6:30 or 7:00PM return to the updated 6:30. But if you just catch *most* of the words, you may not understand that. And you might not realize that you have to be back or else the native speaker can't get into the apartment.