Yes, there are two or three storefronts that are a bit "dodgy"

and lots of homosexual couples strolling the main street, but nothing that would stop me from taking kids
I might be biased though because we live very close and several of DD's friends live in Ptown and the neighboring town of Truro. When my kids were about 8-10 there were several conversations about the "sights" but good dialogue about diversity, acceptance, and tolerance. Now the sex shops, I try to avoid getting too close to those storefronts mostly because don't want to explain the contraptions in the window

to my 13 year old. Don't worry, there are only two that I can think of and they are set a bit back from the street so not really noticable unless you are looking for them.
Provincetown is a beautiful community ~ dunes, beaches, art galleries...and for the kids, penny candy stores, old-fashioned toy stores, fudge factory, souvenier shops. I wouldn't miss it if I were coming to Boston. A great ferry ride too!