Maybe just for NPCs, maybe for everyone.

It just feels wrong when all the old people have tight, fit 20-year-old bodies at the age of 80. I feel there should be more change as you move the age slider, like you see the body get wrinkles or get weaker and not buff. Maybe also weight actually changes the weight, and not just muscle mass.

Character diversity is something that has been lacking in the games, but it is a technical limitation more so than any design choice.

The problem with multiple body shapes, at least with the current engines is the clothing. Every article of clothing would need to be made for each body type, other wise it would clip all over the place. Clothing in these games replaces the skin on the character, so it has to have the same shape as the body (slim, fat, whatever). This is why there are some clothing mods that require certain body mods to work and some clothing mods only work on vanilla bodies.