First, same sex people do in fact visit each other for dinner. It can be romantic, or it can be platonic. The dad getting riled up is 100% on him and not SE's responsibility. If the son chooses to interpret the scene romantically that is on the son. If the son is actively pursuing same-sex options in the game, that's the choice he made in the game given an array of options available. If the father doesn't like the son doing that, 1) get a different game 2) again, it's on them not SE. And those options are still going to exist in real life regardless, too. Life is full of options. It's why your reaction confuses me so much. I honestly can't imagine going through a day where you had zero choices allowed.
People can certainly make the choice to be homophobic jerks. That doesn't mean everyone else should stop what they're doing to cater to them. In a world full of options, they don't have to engage what they don't want to while people who do want to go with those things can. The homophobic people do not get to decide how anyone else lives their life however, same way that no one can force them to play a game with homoerotic options if they don't want to. But that game has a right to exist.
See, this confuses me too.
I can't imagine going up to people, online or otherwise, and saying "I'm the nicest person ever". It's not for me to decide. I just do the best I can, and there are absolutely moments I'm not proud of along with moments I've said "screw it" and just gave myself license to be bitchy. That claim makes it difficult for me to take you at your word here.
This really sounds like it isn't the game for you to be honest. It still has the right to exist, but I really don't know why you're playing it or arguing for what form it should take when it sounds like the last thing you'd want to engage with. If you truly think the Little Mermaid is too extreme for children, personally I think you may be running the risk of over-sheltering and stunting your kids. When everyone else has managed to learn social cues and that there is a basic concept of romance existing they'll have no idea whatsoever. At the end of the day though what you do in your house is at your discretion. Just know there are plenty of people who would disagree, as is their right.