Looking forward to the upcoming Demo
I'll make sure there's a child guard feature by the second demo
The nudity in Daggerfall seemed to be isolated to when your character is either; barging uninvited into strangers bedrooms, or visiting cults and temples where 'this sort of thing' is tolerated or celebrated. Can't you simply avoid these places (perhaps turning a blind eye to those within the lair of the King of Worms)? And would this mean removing Seducers, Nymphs and Lamias from the bestiary?
I think time should be spent adding features, not making Daggerfall as 'politically correct' as Oblivion. The 'low-quality' graphics of Daggerfall should reassure you that players won't be particularly interested in the nudity at any rate.
I would hope you concede that in reality, violence is vastly more horrific than nudity - although the latter is, I grant you, harder to justify within a game. But I don't think any of Daggerfalls nudity is gratuitous, which is the crux of the matter.