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My 10 cents. First yes Pokemon and Humans 100% have had sexual relationships in the Pokemon universe. Whether or not the Folk Tales are true, Humans will have a sexual relationship with anything in the world. People in reality have sex with animals, non-sentient objects.... literally anything, that would transfer over to a Pokemon universe. People would fuck their pokemon even if its illegal or done in ancient times, or taboo ect. it would happen.
Now on the matter of Pokemon x Human relationships leading to children. That's more of a debate to something we really can only guess. There are magical humans in the Pokemon world, but we don't have any hard evidence of those powers origins besides "They always had them." with no details as to if it came from their blood or if they just learned how to do it by training. This is very limited in detail and technically has no explicit canon answer as to if a human can conceive with a Pokemon.
