Seagull: Ha! Yeah, I mean it would be nice if parent/child could be prevented, but not only that: since vilagers never lose their fertility (er, in VV1, I haven't played VV2 yet) and since mating begins at 18, it's quite plausible that you might need to worry about grandparent/grandchild as well. And I definitely didn't say such relationships were commonly condoned, if that's what you thought I meant.
Tess: Yes, it's just a game, but it's a game that's fun because of our human tendency to anthropomorphize. We all know that the characters aren't real, but I doubt I'm the only one who finds himself fleshing out the action of the game into more developed stories and fleshed-out characters. So it is quite understandable that users would care about incest, and other things that don't actually affect game play.
It is quite true that attitudes towards (and definitions of) incest vary significantly from culture to culture, but the concept is hardly unique to our society. In fact, I'd say that just about every culture has the concept (again, I'm not an anthropologist), even if the details vary. (And as I said above, inhabitants of Isola, if they existed, could never be as fastidious about cousins and more distant relatives as we are.)
And as for lineage, it seems to me that not only is it not a modern concept, but it's even LESS important in our modern culture than it was in antiquity.