You seem kind of hung up on Argonian briasts.
A quick biology lesson:
briasts are something only primates have. Look at any other mammal, all they have are nipbles. Argonians also have hands (also primate-only) and vocal chords. All the above evidence points to Argonians as being great apes.
Oh wait, they also have tails, which apes don't. I guess that means Argonians are monkeys instead.
The problem here is that there is no indication, as far as I know anyway, that Argonians have nipbles. In fact, http://img227.imageshack.us/img227/6733/argonian2.png
So, no mammaries, just mounds of fat on female chests. If we apply real world ideas to it, they're probably solely a mating construct, not unusual in the animal kingdom.
If we apply TES ideas to it, the gods made so all the sentient races are able to interbreed, and thus attempted to make them all, in some way, able to attract the others.