Slept in it, made love in it. Basically did everything in it that you would do in a normal bedroom. Like anything else, everything depends on where you are, who you are with and what you are there for.
The cuddy is a great place for kids to take naps. I would highly recommend a small, 12V electric fan like some truckers have in their cabs. And if you're close to shore where gnats, mosquitoes and flys can be a problem some mosquito netting across the opening and the top is a good idea. The gentle rocking of the boat in the waves should help induce sleep for the youngsters.... and yes, they must sleep with their PFD's on.