my daughter is 7, and she will occasionally watch me playing the game. the various skeletons, draugr, and other enemies didn't seem to bother her, but i had a dog following me for awhile, and she wanted me to avoid EVERY fight so the dog wouldn't accidentally get killed.
i ended up sending him back home.
100 hours in, and i haven't seen anything i would consider sexual content, other than the aforementioned riften quest, and that's just BARELY adult in nature. i agree the M rating is for violence and blood, and really, if your kid watches Animal Planet, they've probably seen worse.
she enjoyed the fights with dragons, and she loved watching me explore the world (the mammoths were a particular favorite). i don't have any reservations about letting her see this game, i think it probably rests on the borderline of T and M. it's not like a 'Left 4 Dead' or something, which i would never let her watch until she's in her mid-20s.
on the topic of marriage...i married Mjoll and moved her into my house in Whiterun. anyone that's seen/met her knows she has this dude Airen that hangs around talking about how he's never seen her more upset. they have this 'history' where he allegedly saved her life or something. clearly he was into her, but too bad, i'm the one she married.
well, i kept Lydia as my travelling companion, thinking Mjoll would be cool with it, and then who do i see outside my house in Whiterun when Lydia and i are getting ready to go adventuring? freakin' AIREN! thought i left him back in Riften, what's he doing here? Mjoll's got some 'splainin to do!
i think Mjoll might be cheating on me. i need to familiarize her with how i dealt with wives when i was playing 'Fable II'.
(just wanted to prove my nerd credentials in this thread, ha!)