The Shaman said:
The adventurers walk into a tavern for a well-deserved tankard or three. The other patrons of the tavern see a dragonling and, knowing that a dragon's skin is going to be worth a lot of shekels to someone somewhere, whether it's the noble lord with bounty on dragons, or the wizard looking for dragon scales as a spell component, immediately attack the dragonling en masse. The adventurers escape the tavern, only to encounter the town guard who, upon seeing the dragonling, immediately attack as well...
Sigh... you seem rather hung up on that little point.
You see, this actually came up in one of my games. My fiancée, in fact, wanted to play a dragon. She wanted to play a silver dragon to be exact. So I was working it out so that a silver dragon would need the party to take care of her daughter for reasons unimportant to this discussion.
The fact that she was a dragon was to be a very large complication for the reasons you mentioned, more or less. Lots of unscrupulous people, if they knew of her, would want her. In fact, the main evil organization of the campaign was specifically after her and knew exactly who she was.
Now, metallic dragons have this wonderful little ability... they can turn into humans (or others)! Solves 99% of your problems right there! Suddenly, it's not so difficult to blend the little wyrmling into regular society, unless the PC makes some bad decisions. Instead of being a plot derailer, the fact that the character's a dragon si strictly a plot device, and a pretty damn good one at that.
This might cause problems if the player wanted to be a chromatic dragon, but there's a bunch of different ways you could address that. You could just give them the same shapeshifting ability as a metallic dragon. You could say that they're a rogue "good" chromatic dragon if, as is likely, having an evil character would spoil the group dynamics. You could just say to the player "Sorry, but I'd rather you not play a chromatic dragon... how about one of these metallics? They're shiny!" (remember, compromise!)
Yes, the DM does the lion's share of the work. In fact, I'll go a step farther and say the DM does
all the work. But all that work is for nought if it isn't tailored to and engaging the players. One of the best things about this hobby, IMHO, is the surprises and curve balls players can throw you and being able to readjust things on the fly. If you just want to make your world and tell your story, you might as well just write a novel. I don't think it's a burden letting players influence me, I take it as one of the perks.