My mother is very religious but not a stuffy person. I was pretty sheltered but had older friends and/or older brothers of friends to help me. I think kids are going to get more from a teacher or friends than they will their parents when it comes to act of sex.
As far as morals go how you treat them and your spouse should teach them what they need to know in that regard.
My father's parents weren't shy about talking about their own business though. I have some hilarious stories from my Dad about that.