Rule 34. I'm sure there are people out there who'll be attracted to this. And if you are, it's okay man. We can't control what we are attracted to. 

It doesn't hurt, but it's not a big deal for the vast majority of games. Characters can be well-designed but average to ugly looking in attractiveness.
In character creators for a most games, you should have quite a bit of options to make characters that are attractive, plain, ugly, etc.

The reason characters in videogames are attractive is the exact same reason why actors are attractive. People like to look at things that are attractive.

I don't see anything wrong with it and I vehemently disagree with the idea that it takes resources away from a game. I don't think it takes resources away from a game to make a not attractive character either. I think it really is just a natural preference to like to look at someone who is attractive. Having someone who isn't attractive can help with relatability for people who aren't, however.

I really don't think it should matter much.

People like to look at good looking things and people, but it's hard to relate to characters that look like porcelain dolls. Concord went too far in trying to make a lot of their characters look like 'ordinary' people that I had no interest in playing as, but I'm not necessarily interested in playing as a combat stripper, either.

Yeah, but a lot of it comes down to tone as I said. First and foremost the character design has to fit the general tone of the game. Lady Dimitrescu fits the setting, the tone, the general vibe of Resident Evil pretty well, but she would be totally misplaced in Monster Hunter which has more silly character interactions. A character needs to fit their game first. And yes, we generally prefer to look at pretty people, but even an ugly character can be good, if it fits the setting well. This can be said about the Souls games, most characters look deformed and somehow offputting. But it fits the setting and the tone.

True.

Pretty privilege. If a game has asetically pleasing characters but isn't very good, I'm at least willing to watch a trailer or a review just to give it a chance. 

I wouldn't have bought FF7 remake, I played the demo and the exaggerated anime personalities turned me off but I just kept thinking ah, maybe they'll change later in the game and probably subconsciously my brain was thinking everyone's so good-looking sure it must be good. Got past the bike sequence and they were still all acting weird and I just couldn't stand it anymore. So pretty people don't carry a game, that's for sure but if they hadn't been so mindless and anime I'm sure it would improve the game and I bet it improves the game for people who like that. 

I try not to kink shame. Even if the kink is ascii.

It sounds as if your hatred of Japanese culture put you off(don't worry, I hate it too).  I think something like Lolipop Chainsaw is carried by it's pretty person - the entire premise is based on the MC being hot.  Or the Senran Kagura series; a series that lives and dies by it's fan service.  To this day, I have no idea what the plot is or even what the gameplay looks like but I remember both of these games getting headlines because of the chicks in them.  I don't think either of these games would be culturally relevant if the characters weren't attractive.