Morrowind had a brothel in Suran, a khajiit woman who you could be "special friends" with (in her bedroom, no less), a lewd play dealing with scandalous argonian housekeepers written by a man who also wrote "Dance of the Three-Legged Guar" -- stop and take a moment to think about that title -- and who once forced you to pay him 2000 gold to advance in Great House Hlaalu... unless, of course, you'd agree to strip naked for him.
There was also a series of religious books that had a chapter where Vivec whips out his "spear" to compare it to Molag Bal's while Bal's assembled host looked on in envy, hoisting their own spears in turn. Vivec was a hermaphrodite who gave birth at some point in the 36 Lessons, I believe.
Anvil in Oblivion had its own set of sordid goings-on. Heinrich Oaken-Hull's wife slept (literally) with the town smith's apprentice on days he was out of town. A boarding house at the docks was renowned for employees keeping beds warm, and there was a side quest in which three women used six to rob people.
Bear in mind, none of this justifies romance. It's flavor, nothing more, and it makes the world feel a bit more alive. I can't help but think there's some poor Argonian call girl out there who is sick of looking at her frilly maid outfit, and an actual maid who must endure hurtful comments about her supposed six life while she works, both of them hoping against hope that Crassus Curio is skewered in a very uncomfortable place in the Deadlands of Mehrunes Dagon.