All I've ever heard is that the ownership wants it to be a PG-13 environment.
PG-13 does not equal "family friendly".
G-Rated = "family friendly"
I have never seen anyone in a position of authority here admonish someone for breaking out of the boundaries of a "G Rating".
None of the avatars I've seen are crossing any sort of line. There is nothing wrong with the human body. If your niece is close enough to even see what the avatars are, and deranged enough to be adversely influenced by seeing a full-figured woman WALKING, or DANCING, you have WAY bigger problems than the family-friendliness of the Hype.
As for the ads, that's your fault. I see no ads.