I don't completely disagree with you
There is a big difference between nudity and sexuality. I think that line is far more sharply defined than it needs to be in North America. Europe gets it...they're not afraid of the human body like Americans are. In the US, "clean" and "dirty" are rigidly juxtaposed; there are censorship rules in place that prevent any kind of nudity before a certain time of night. I find fault with that, though, because it lumps all forms of nudity together (furthermore, it lumps them all together under the label of "Bad stuff, protect your child's virgin eyes from naked humans!")
I don't think we need to hide artistic or otherwise non-sexualized nudity to the extent that we do on this continent. Children aren't going to scarred by seeing nude people; it's not "adult material", it's just nature. Am I saying we should let our kids watch hard sex scenes? No, not at all. I'm saying there is room to allow for non-sexual nudity during daytime TV hours, as well as the "after 10pm" sex shows.
It's about how "sex" is portrayed as well. There are tasteful expressions of love, and there are pornos. One is child safe, the other is not.
There is also a HUGE element of hypocrisy that I'd like to touch on. As I mentioned above, North America is a lot more conservative than Europe (and even Canada in a lot of ways. I'm generalizing, of course.) To answer your question, yes, adults DO need sex. It's hardwired into our biology. It's not necessary in the same sense as oxygen and water of course, but it's an instinctive urge that cannot be ignored. When that urge is suppressed, bad things happen (ie. Priests and alterboys). All of the people responsible for maintaining censorship on things deemed too sexual go home at night and jerk off just like everyone else. I promise you that.
Sex creates problems because humans are too smart. Literally every single problem in our civilization, sex-related or not, stems from the fact that we're too intelligent for our own good. When is the last time you saw a dog eat a tub of ice cream after a bad breakup, or a gazelle fight the urge to call that girl he met at the bar last night and break the "2 day rule"? There are very few species that form long-term relationships; normally, nature's mandate is a simple two step process: 1) Attract a mate, 2) Make babies. Repeat every year with whatever mate is nearby until death. Naturally, animals are sort of skanky. It's just that humans have giant brains, and we managed to indoctrinate ourselves with cultural moral systems that look down upon promiscuity. We have the natural urge for sex like any other animal, but also the culturally constructed urge to form long-term pair bonds. The conflict at the heart of your question is the conflict between those 2 elements.
So I guess my point with all this is simply to say that:
1) We don't need to shelter our children from boobies. Hide the porn, but showing them nude human forms and expressions of love isn't going to scar them.
2) Humans are messed up. Our problems are self-created, and yet they are unfixable because we can't change our traditions. Not easily, anyway. The trend towards sexualization is, I believe, intimately tied to the trend towards commercialization/consumerism; marketers know that we like sex, so that's what they give us.