The race would according to lore be the mother's, so no hybrids - but there still must be a baby for each race.
But my main reason not to like the idea is what others already stated - you have to wait nine months for the baby to be born, which isn't very fun for the female PC. And it doesn't end there, you know - it takes several years before a child isn't totally dependent on her parents - mostly the mother. Not very fun for the female PC. Or maybe we could get an armored baby sling so we could carry the baby with us when we go draugr-hunting?
But ok, let's do it with realism. Giving birth has historically been (and still is, in some parts of the world) probably the most dangerous thing a woman can do. So make sure to stack up with healing potions and spells before it's time to deliver the baby, unless you (or the wife, for male PC's) won't die in the process! And then get that armored sling on and go adventuring. Every hour, you'd be forced into "baby conversation", when baby wants to feed, get a new diaper or just wants to be entertained. Even in the middle of fights. Oh, and monsters, bandits and beast can of course kill your baby, so you must defend the little one as well as yourself. Or, you could leave the baby at home, which wouldn't be a problem for males, but females would need to hire a wetnurse. Or, in worst case, a goat, which probably would mean your baby is dead next time you come home.
Ok, I was being sarcastic when I first started writing this, but I've change my mind - babies could be fun, but only with a hardcoe, realistic mode.
