I think that's the main reason why she's playing those imouto games - she wants to be that close to her brother as the imoutos in the game. That does not mean neccessarily that she also is deeply in love with him and would want an intimate relationship with him, just that (at least) she is missing being close to her brother.
Decent? Hardly
Caring? It seems he cares about Kirino a bit at least (although he doesn't seem to show that), but about Kyousuke? No. He never seemed to have cared much about him in the first place, and after Kyousuke "revealed" himself as an otaku, he stopped caring for him altogether.
Yes, stern and cold - that's definitely fitting the father.
He indeed seems to not have much contact to her (and much less still to Kyousuke).
From what little we saw of her, she seems to be a quite nice and tolerant person. When Kyousuke comes home, she warns him about his father being in a really foul modd, and when he asks her to leave him alone with his father, she willingly agrees. In his talk then, he mentions that his mother had seen his porn, and didn't have a problem with that at all.
As I said, didn't quite get that impression.
I don't think she does it out of a "not feeling loved at all" feeling in the family (which she doesn't have imo).
She rather does it because she wants to be close to her onii-san. As you said, if that desire for closeness includes any sexual desire, remains to be seen.