The reason (I'm pretty positive) is due to the fact that you can make the sims have sex. Now the actual action doesn't say "sex" it says "woohoo" but its pretty obvious what they are doing. There is even a little video the first time the two sims "woohoo" where they show them jumping under the covers. If you don't want your 10 year old exposed to that I'd definitely say its not appropriate.
Thanks so much for your reply - very helpful! Since my son is appalled that anyone would ever want to have sex, I think it's one action he won't be selecting, at least for a year or two. I heard from a kid that there is a grim reaper or some such thing that is pretty scary and my boy is pretty easily scared.
Sims can die, yes. When a Sim dies, the Grim Reaper shows up and takes them away on a beam of light, unless they die very happy when they are old and simply run out of time. When that happens, the Grim Reaper shows up wearing a lei with hula girls, hands the old Sim a drink, they pick up a suitcase, and leave. About 99% of my Sims die this way. It's sad to see them go, but not super scary, and I'm easily scared. Toddlers and children don't die. If they are hungry or neglected, a social worker comes to take them away to be adopted by a good family.
You're the best judge of what your child can handle and what you want him to be exposed to. You might like to go to YouTube and look for videos with "sims 2 grim reaper" or search the official site (thesims2.com) for official videos on what this looks like. Good luck!