I will say that I do not like Cuties and believe that it is seriously setting both girls and us back for years by fuelling a moral panic which was not burning so hot. And which was going to subside by itself just by the social media generations taking over.
But, you make good points:
Whether or not it is done for art or for fun really doesn't make any difference. If you're asking a child to twerk what difference would it make to the child if done for the sake of art or because you enjoyed watching it?
I would argue that children dancing sexually is not harmful and is not exploitative if the child is doing what they enjoy. In fact I would argue that a child who is able to dance like that in front of the entire world is a sign of positive mental health. It takes a lot of confidence and a lot of self esteem to be able to do what these girls did in the film.
I agree with that too. I would only add the nuance that to me it's pretty clear that Netflix bought the movie rights just because they believed (mostly rightly so) that scandals sell, and not because of any position about the artistic merit of the film or the politics of underage sexy dancing. So the motivations from Netflix are negative. But dancing itself is not.