Seriously. It is a nipple, everyone has got one.

Well, yes. For some reason it’s OK to show an entire breast as long as you cover the nipple. I have no idea what makes the nipple the particularly “private” part of a breast; it seems absurd to me that revealing a breast is OK as long as you cover the nipple. I realize I have an opposite point of view from yours (I’d prefer no breast, you see no problem with showing the whole thing), but what’s the point in covering up the nipple if you’re going to show everything else?

What is it about nudity that freaks people out so much?

Well, we’ve had this discussion before, but I think it’s fair to say that in this society the majority of people feel that nudity is a private thing not to be shared publicly. Some have convictions about this; others just feel it’s wrong somehow, thus the aforementioned “R” rating.