Yep they join the household and act and age like a normal sim, though all the ones I have turned have had wild colored hair. They have to option to turn turn back to a toy at will from there.

Boarding schools are borked for me as well, I sent 2 kids off and they spent a day there and are now hanging around the house  and I can't send the little buggers off again.
The relationship bug comes and goes, for me restarting works. But then I did not have it from the start.

On an interesting note I discovered that children of imaginary friends inherit the option to turn to toy form.

And the opera gloves?

Random fun things.

So far in playing I have found that if you use a ghost potion then try for baby, you can get a ghost baby out of it.

You can make your imaginary friend real with a potion, they will then join the family as playable and you can switch back to toy form at will. Not sure if the fact that you can marry and have children with your imaginary friend is creepy or not but that may be personal preference.

Not sure if it is the celebrity status or the romantic reputation that is borked to hell, but it keeps updating with either old flirts or the fact that "OMG one sim kissed another sim who happens to be a celebrity!!!" completely ignoring the fact that the sims in question are married and have 3 kids.
And really do we need everyone in the house to make a memory that they received a party invitation? I kinda doubt the larva really care.

I'm not sure which is worse, the hair or those creepy eyes on the toddler.

Now this has got me curious. I think most likely not if the father just dies. But if he dies and you make him a playable ghost?
And now I want to see what happens if the mom dies when pregnant, if you bring her back will she still be pregnant?
Off to kill some sims, will report back with findings.

Though I am starting to suspect I am a rather twisted individual since this sounds like fun.


ETA
The results are in! And they are...weird

Base run is one male pollinating through Supercomputer 30 females. I don't recommend more than thirty because the one time I tried I got a BFBVFS when all the mothers went into labor.

Run with father killed and brought back as playable ghost after pollinating -  all children normal human.
Run with father as playable ghost (as control) before pollinating - roughly 50/50 normal human or ghost.
Run with father bitten by vampire after pollinating (to see percentage) - all children vampires.

And apparently you can not kill a pregnant sim. Various methods were tried.
Fire - the rugs did not light until I removed her from the room.
Water - She had full red bars and the drowning moodlet for 3-4 sim hours.
Hunger - Repeated dragging down of the hunger bar just sent her to the fridge each time.

Old age and electrocution were not really feasible. May try a meteor at a later date but I suspect she would only walk away singed.

I did find it interesting that the vampire trait is that all encompassing.

Perhaps not, but the idea of different birth control failures for the different traits has had me giggling all morning. Then again I seem to be easily amused.

Risky woo-hoo?
As in birth control is 99.9% effective, Congratulations! You just became part of the .1% type risky?

Is it possible to have a log of all the births ,marriages ,and deaths?
After a long wollfrun, it would be nice to be able to go back and see who married who without having to poke at individual family trees.