What is the difference between a simulation of sex on the screen and a simulation of killing on the screen?
I doubt that the teenagers are associating the game cards and sex parts with real sex, more likely they are associating them with the sexy parts of the game, like most people do. The fact that the witcher is a game helps a lot to create distance between the acts that you do in game and the acts that you could do in real life. I also don't see where the difference is between an arousal from the cards and the small adrenaline kick or whatever we get from FPS games.
Your mistake is the assumption that there is a necessary difference between killing on the screen and sex on the screen, and unless you can point out why you should be allowed to make that assumption, then your entire argument falls.
Another point is that it isn't even sex on the screen, since that could include movies with actual actors. It is sex on the screen of a computer running a computer game with graphics that are not lifelike. I really should detail it more, but I'm afraid of ruining games for me.
I don't know why so many people focus on the racy parts of the game. The parts that originally got me hyped and which still are the parts that I mainly want to buy the game for, are the advertised elements of having to make hard choices and not necessarily knowing the consequences. That mechanic could be very interesting, but also very annoying, so I want to try it out myself.
But wasn't the central vision to make a game that draws heavily from some book or something? If that book contains sex and harsh language even from the minor characters, then that does take away from the central vision. The question that I think is relevant is whether it takes enough away that it would make a difference i.e. does the player feel the missing parts.
Anything can be a wallpaper and there are many official screenshots out there. On the other hand, I would support this notion if you're talking about pretty hand drawn concept art. I demand pretty walpaperized concept art.