I came to VV2 later than most of you and don't know if they tweaked the game by the time I downloaded it or not, but there is definitely a passing on of family traits. I kept track of the parentage of the children and took screenshots of them. You can see a great resemblence in family members when done this way. So the suggestion to make families look more like families, well, they did it already. And if you don't want a lot of breeding going on, for heaven's sake, unclick the breeding choice. There are a few that will insist on breeding even when Parenting is not chosen, but it's not that many.

.