...Never heard of 'Eight Worlds Stories' but i assume it must have at least 3 block buster movies to its name and 2 major spin off series rite? Anyway, it sounds ahead of it's time from what i saw in Wiki.
I mention the Asgard because they have lost all sexuality and can only reproduce by cloning. It will be the inevitable fate of any race that confuses the natural purpose of male and female sexuality and reproduction occurs in any direction, then sexuality looses it's distinct function in evolutionary terms and such traits are always lost, that is basic evolutionary mechanics.
Varley's only work that hit the big screen, Millennium, is not one of my faves of his and the movie is even weaker. I'd definitely like to see a few Eight Worlds miniseries/series from a shop like the folks who made Rome. I mentioned Varley because I'm pretty sure that the Asgard path to asexuality and eventual decline is one among many paths for societies that gain substantial control over their biology and consciousness. Iain Banks' Culture stories are another take on how a society that can easily change sexes can remain very sexual.
Mods are still of no interest to me because Elemental/Enchantress is so far from being stable, but seeing a mod that included things like magical sex changes might be fun after game content changes settle down. We also had some fun threads a long while ago about using magic to manipulate the offspring of the dynasty system. Right now, though, the OP is right that breeding in the game has some pretty weird rules.