(2) Let's say a player wants to take a class that slowly begins transforming him into a dragon, half-dragon, dragonkin, or the like, after having multiple meetings with a "dragon cult" that had ritualistically infused themselves with dragon blood (the PC wants to copy the ritual). The players know that dragons haven't been seen in about a hundred years since the last Great War, and think it would be cool to see this progress. On the surface, this looks fine. It would be cool to see, so no problems.
Now, let's add the facts of what only the GM knows: the dragons were not eliminated, but were forcibly controlled (through artifacts) by the Dragon Masters and herded over the mountains to the north. Then, artifacts were created (using dragon magic and blood) to drive all of dragonkind insane, unless controlled. This keeps dragons in a state of perpetual control, else they lose all sanity. So, they have the choice: do they lose all sanity but become free, or do they willingly serve malicious masters but keep their minds intact? With these two options, the dragons mostly serve, waiting for the ritual to be undone.
Now, your player wants to infuse himself with dragon blood. Do you let him do so, knowing he'll drive himself insane (or, at best, controlled by the bad guys)? Or, do you say no, and save the PC so the player can keep having fun? As of this point, the "dragon cult" is deeply woven into your campaign, so while you could retcon it out, it would not be nearly as fulfilling to the players once they uncovered what it really was (assume it would be fulfilling to them as players to uncover it, like it would be for mine). And, if you retcon it out, you'll be denying them the enjoyment of that deeply fulfilling feeling.
I would actually probably allow the PC to begin to transform, honestly. He'd just have made a bad decision by performing the ritual that made him dragon-blooded, and should have looked further into it. The PC, however, will now go insane or be controlled, which is probably a massive problem for player enjoyment (for some groups, like in the OP). If you wanted to keep the player's enjoyment in mind, you might want to say, "no, you can't become dragon-blooded." It definitely doesn't mean you don't care.
At any rate, when I hear you say...
... I just can't help but heartily disagree. Sometimes, you dismiss player requests
because you care about their enjoyment. It's not me out to screw my players. It's me out to make it fun. Our play style is just different. As always, play what you like