It took me probably longer than it should have to see that it's a New Zealanders' sardonic take on Americans, specifically Californians, more specifically, Americans as shown in TV shows. For those old enough to remember the 70s/80s (American) show Soap, Atlantis High bears a certain resemblance, only about 10x weirder and mainly with teenagers. It's all done with tongue firmly in cheek, sending up TV tropes right and left. As far as it supposedly being salacious (as was commented here), IDK, I think young kids would just see it all as goofy and silly with any more "adult" meanings going right over their heads. By the time kids get the references, they're probably more than old enough to see the show.