I agree on the part about being able to marry NPCs. 

You will not be left without champions, however, as the grandchildren will sometimes ally themselves with their mothers original faction, ie. leaving the faction they were born into and joining the mother's parent's faction. Did that make sense?

Which could make for all sorts of interesting repercussions.  Perhaps inbred children have a higher chance of achieving some special ability...but at the cost of public opprobrium that might cause your cities to revolt. 

Just so you know your grandchildren can and sometimes will decide to join your faction instead of their parents one. So they took this into account already. Same for when you have grandkids with that female who came to your side. Those babies grow up and some might side with you or with their other grandparents faction.

I heartily endorse adding incest to the game.

Also, as was mentioned in the suggestions forum, we need a spell to change the sex of heroes.  "Arcane Transgendering."

I agree, though I would want to see this as one part of an overhaul of the champion system. I would love to see loyalty added to the game and each champion given a side ( Empire or Faction ) which dictates their initial loyalty. At current, champions don't feel real enough as they are just like normal units whose level and equipment you can manage. It would be really cool if you could marry your daughters and granddaughters to them to improve their loyalty or to add more depth to your family tree.

i hope they will enable it in the first exapansion

You can marry your daughters to the neutral factions (if you have them enabled and one makes it into your game); then at least your daughter will not actively be competing against you. But still, meh.

The best outcome I've had with grandchildren was marrying my daughter to Kul-al-Kulan's son, then having their son defect to me, which gave me a leader with the Organized trait (since the pre-gen Sovs still have Organized). That would also work with Kraxix or Markinn. Likewise I've goten grandaughters with Royalty from Procipinee's line, etc.