I don't think the bodies should rot to skeletons, especially if its near a town. I mean, the townspeople wouldn't just leave a body rotting near them would they?
I think they should implement something where either you can dispose of the bodies, or if you choose not to and NPC that bumps into them will either attempt to move the body by themselves, or call help
I completely agree that NPCs should react realistically to dead NPCs (a hardened warrior shouldn't flinch at a dead body, but a child should be scared). and any civilized society would not let bodies decompose in the middle of the streets. Even men before homo-erectus (very early man, one of the many "missing links") buried their dead.
Viking Funerals for the dead (at least the nobles/well-respected).... now thatd be cool.
I made this thread with no external variables in mind however, just "if a person is dead, from a stab or other bloody wound, then this should happen"