what does sexuality do in game ?
if a character is straight, can i still convince them to engage sexually with me being the same gender ? is it simply more difficult or does it make it impossible ?
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You can, under certain circumstances. I like to mess with stuff like this in order to see how the game has changed over time (plus orientation play is hot), and right now it seems like NPCs will break their stated orientation most readily if they: (a) have dominant and/or slutty traits and (b) are at the River Rat and predisposed to hooking up. Otherwise they wont respond to flirting and will just turn you down. A few will say yes to booty calls right off the bat, but that's rare and I'm not sure what combination of traits causes this.
You can also turn on cheats and change a character's traits + boost their lust/romance stats, but that's an instant 'sleep with me' button and less fun (for me, at least).