DD started playing this when she was 10. We're another square family - we don't let her watch PG-13 without reviewing them first. DS (then 20) was playing it & she'd go in his room to watch for quite a while before we got it for her. Somehow, though, I missed certain aspects. Sometimes the noises they make (they don't say "words" when the talk) sound suggestive to me. Last year that went over her head - not this year.
Also, she created a "family" thinking it was a husband, wife & their child. Even though they live in the same house, they won't sleep in the same bed until they "fall in love" - which is 100% friends. You get them to do that by talking, kissing, hugging, complimenting, flirting, etc. It's possible to have them become 100% friends with more than one person at a time.
I'm enough of a prude that I wouldn't have gotten it for her if I'd realized some of the questions that it has prompted. (No, I don't think it's going to cause long-term "damage" to her psyche or anything . . . )
Deb