You don't need characters that short.
Lalafells were based on Tarutaru from FFXI, which was made over more than a decade ago. Also, they resemble more of gnome-like humanoids rather than children, as the males of these races have facial hair. Even in their voices, you can tell that they are NOT children. Your argument there is lacking. In the FF14 modding community, it's looked down upon to make NSFW mods for Lalas. You ask for a NSFW mod for Lala and you're practically asking to be banned from any website/Discord/etc for mods there.
The ESRB rating makes sense, I think you're just upset you can't make a child-sized character anymore. 5' 0" is already short enough. This thread is going to just be like the other threads where OP can't accept that the height restriction won't change, so they call the game "unplayable".
It's also funny because you actually CAN make a child character still. 5'0'' is the average height of a 12 year old male in the U.S. Some adults obviously stop growing when they reach this height, but technically anyone wanting a kid character can already make a kid character.
I think A LOT of people already are playing young characters because I see a lot of people who scaled down their character's height by quite a bit, while also selecting the more youtfhul facial appearance.
FFXIV is also not the greatest example concerning lalafells, because they are not human/human-like, and there are examples of actual children in the game (Alphinaud, Alisaie, Khloe, and a handful of others), yet the players can not come close to making a character like them (and Alphinaud/Alisaie are 16/17, which in XIV makes them legal).
The west DOES have a hangup and phobia about child characters that really is kind of sad, but the character height change in the western version is of little concern to me when compared to the other problems the western version has. (Missing content with no roadmap for when anything will be released, Star Gem currency being morphed into an expensive premium currency, and so on).
Not saying I agree with changes that were made, but it also does kind of make sense. Western culture has a serious paranoia when it comes to sexual content, which is probably why a lot of people just think "eww pedo alert" whenever someone brings stuff like this up.