I personally have worked on some very small games that were never released since I didn't want to release them, but the furthest I ever went was adding a third gender option, since most of the games were designed to be online roleplaying games...
But, a game like you are talking about, would be, amazing. Also, just adding, since I mostly play games with lower graphic qualities(even though my computer can run most games on ultra), I can easily say that even the worst graphics can still allow you to feel attached to the character you are playing as. Though, you still have that stupid part of the gaming community that is obsessed with graphics...
By the way, I saw someone talking about how if only you could also control your hands with the Oculus Rift? Might not be exactly what you were looking for, but go check out Loading Human on YouTube. They are the closest I have seen to having a full virtual reality experience.