This.
And it's probably for the best as well. I honestly can't imagine baby Orcs, Khajits or Argonians.
My problem with the beast races (and Orcs) in general, for this kind of game, is that these sorts of mythological creatures are supposed to be intangible and unexplained, that's kind of what myth is. That's okay when it's The Lord of the Rings and your only relationship to Orcs and other monstrous creatures is killing them, but with Elder Scrolls we get into the area of domestic life. So you get the awkward questions like "What do Khajits do for fun?" "Erm, chase a ball of string..."
Maybe I'm just lacking imagination, but it's certainly a big design challenge to factor in some of the "stranger" races' children without getting a little silly.
I agree, but I think that mentality would go only to witnessing the birth, or the infant stages exclusively. A couple of pre-adolescent versions of each race should be no big deal, in my opinion. They'll have developed to the point where it won't really spoil the mystery. But, yeah, maybe Khajiit and Argonian children should be left out, but I think Orsimer oughtta stay. There's no real mystery to their reproduction, really. Khajiit have the Ja'Kha'jay(Lunar Lattice), and Argonians' forms vary depending on "how many times they lick the tree" or whatever. Orcs are just elves cursed with ugly, for the most part.
Also, even if elves mated as often as humans, they produce children much less often. Hard to impregnate an elf, so that'd be a real reason against any mer child appearing.
Basically, humans are all we're likely to see, and for good, lore based reason.