I voted #2 as well. As long as a game doesn't dissolve into a personal tabletop porn session, it's fine by me.
Sex & sexuality can be part of the roleplaying experience, but it should by no means dominate it or enforced, esp. when it may be an unwelcome element for some participants. Plus, IMHO, I really see no need whatsoever for rulesets that focus on it: it's something that can be a pure roleplay element in the game, if so desired.
While on this topic:
My g/f was invited by a group at a game store (which has since closed down, but not for reasons related in this tale). This group placed a more historically-oriented GURPS game. However, this game was also quite mature-themed, to say the least. So mature-themed that it was mandatory, apparently, for all characters to actually have points spent on some sexual quirk/aspect/skill/trait/etc.--it was not optional per player, but mandatory, apparently.
Well, my g/f attended a few games, and she enjoyed them, but life got in the way & she wasn't able to attend regularly. After a few calls from one of the members of the group (who was upset that she couldn't regularly attend, and didn't really just accept her reasons for not showing but rather tried arguing against them), she decided to quit attending. Her main interest in the game was the more historically-oriented setting, but IIRC, it seemed that the sexual aspect was actually focused on more instead.
Interesting to note that a while after this whole mess occurred, we chatted with a few freinds who regularly gamed at that store as well. Turns out that said group wasn't liked much at all by many of the regulars, as it was.
I dunno--IMHO, it seems a bit less mature to focus on sexual elements in a game, and even to implement mechanics & a system around it rather than just dealing with it purely as a roleplaying (& rule/mechanics-free) element.