*GROAN* Fine, I'll wear the freaking condom. But I am NOT psyched about it.

Ah but Semen is great at rejuvenating Soul Gems, so by not wearing a condom I'm doing you a big favor!

But can liches even have children?

Physical function is not supposed to be affected by the process, so I think it is possible. The examples Kyubey quoted in Ep 11 may not have children, but if what he said was true (most historically important women were), then they certainly can have children.

Cruentus said:
But can liches even have children?

In the last timeline Mami was alive.
Kyouko was alive too and Madoka didn't exist