I think it's primarily your first guess: The first is that, as video game graphics get better, it is easier to represent sex and vilence in games. For example, GTA was portably not possible until last gen.
This was considered as over the top violence when I was a kid. Lots of parents didn't want their kids to play it.
and not to forget the fuzz about this game ;)
And none of them is really comparable with:
Beware, I live!
I am Sinistar!
Beware, coward!
I hunger!
Roaaaaaaaaaar!