My two cents. As an older mother of a young child, whom also plays vmk (when I am not logged on!), I can see both sides of this thread.
As far as reporting goes though, I think it would be a good idea to stop for a moment before reporting. Think back to your childhood. Mine was spent playing cowboys/indians (today's armies), I played house (boy/girl friends, marriage, babies), certainly played doctor, and summer nights playing hide and seek or ghosts (vampires). I remember "spying" on older siblings and neighborhood kids - giggling and learning of things as yet unknown (some of those rooms).
Yes, we do need to be vigilant for our children with today's issues. But, if you are with your child while they are on the web (vmk or not) you can explain things you do/do not like.
And, as far as the reporting, please try to stop and think back, to your own childhood, before you choose to report a child for nothing worse than, being a child at play. (vmk's target market)