Sorry, but I just can't stop!! I just love the cute little buggers so much that I need to have another dozen before I die!!!!!
Ok, seriously.... there are a couple of issues here.
Firstly, kids. For the most part, less kids is better for the environment. However, while the majority of kids are going to be born to families that don't give a toss about the planet and their spiritual development*, it means that every kid that is born to a couple that is focussed on this journey becomes that much more important to the planet in the long run. Imagine if in 100 years, the only kids that were born were to the muggles - how would society advance???
Secondly, having sex does not mean not having kids! Sex is to be enjoyed and experienced (which is the whole purpose we came here (into this universe) in the first place.
Lastly, you are correct in that it is a hinderance to spiritual development - but only when it becomes obsessive (which it is for the majority of people - the muggles). Like money, the obsession to either have it or avoid it is the problem. A healthy attitude towards it is what's necessary.
(*I use the term 'spiritual development' a bit loosely, as I don't see things the same way as others do. We *are* the spirit, so anything we do is 'developing'.... just maybe not in the way some would like. Also, the prime directive is to experience.... the good, the bad and the ugly.)