Kenneth R.
Cináed
this is correct. it's actually part of the ceiling of the Sistine Chapel in the Vatican.I believe it's Michelangelo's Creation of Adam actually..
the reason why classical sculpture and art had small dicks is because they found that to be aesthetically more appealing in those times. no enlarge-your-penis posters.

as for the use of nudity, it had many symbolic forms. in some cases the lack of clothing indicated insecurity, innocence, frailty, mortality, weakness, purity- among others. it depended on era and context.
why is some nude art and other portrayals 'inappropriate'? i would argue that the difference lies in the intent and motive of the artist for choosing it.