Yes, Jen is bi, she explains so while Klaus is taking advantage of her; whether Karen is cool with her sleeping around or not is unsure (knowing her she would just pull out the whip and paddle on Jen), but those choices are entirely up to you
As far as everything else, in my honest opinion, all I can say is this: you are not required to play this if you don't like its content, that big X in the top right corner of your computer is there for a reason