I actually disagree that most aspects of this game don't hold up anymore. I don't know what it is but something about this game's graphics and models just feels good, even today.
The women were unique and felt somewhat realistic in proportions, sure they were still completely unrealistic compared to a real woman but their bodies flowed in a more natural way than in most 3D games where they look like they're made out of clay and had botched implants. Even if today's standards are higher when it comes to texture quality, lighting, animations, etc. Milfy City is timeless in my opinion.
Story and setting weren't anything special but like you said, they did the job and it allowed to put more focus on character development and relations instead of trying to tell a bullshit story.
It's a shame this game won't be continued, it was just getting real good too :/