On the topic of sims (as a player and hater), I couldn't agree more. I've downloaded countless mods to play out trans characters (which I realized I was doing as a way to sort through my own confusions of my transness), and while yes the sims 4 specifically has the most options in terms of creating trans characters, it is still so incredibly limiting. Because at the end of the day, all the inclusivity is that crumb of representation that we all desire, but it is simply never enough because the people behind these things don't actually really care (which is also why modders have genuinely been carrying this game).
Also, (although Ive only played a little bit so far), Paralives is now out and I am interested in what exactly they chose to implement into the mechanics that perhaps differ from the sims. I feel that the sims has created this exclusive definition of what a life sim is, that in order to even compete, your game must linger in that ominous and dark shadow...that is the sims. Although I have high hopes for Paralives, I do not expect it to subvert the genre. And perhaps this lack of expectation is very telling of my own position in giving up on expecting anything more than the bare minimum in the life sim genre.
(a bit of a side tangeant): I found it so hilarious when the sims 4 implemented the mechanic of 'voting for change' in one of their expansion packs. And although your sim has the option to not vote, its treated as if your sim is so evil for not voting lol. Even within this fictional world, there is no imagination further than "do your part and vote!' .
But anyhow, I think this is one of the reasons why I feel so motivated to make games myself. Like the question you asked, Have we actually sat down and dared to try? My answer is yes I would like to try. And if you do pursue this distant fantasy of a mod, I will patiently wait for the day that you finish that t-shot mod :)
(Also I have never heard of Faggots and Their Friends and I am excited to read it)