@SandraMJ Thank you for this post! I've been thinking about this a LOT after several people have started referring to some of my characters as "furries." This threw me off, because I've been to enough anime conventions and seen enough webcomics to now immediately associate the word "furry" with a sexual fetish – and that's not what I was going for at all in Burning Bright!
I'm really glad that it seems like everyone so far can understand the difference between cute, furry, fan-service characters, and characters who happen to be half or full animal because it's part of the story.
For mine, the decision to use animal-human hybrid characters was partially from the fact that most of the story is set in another world, and I wanted to come up with a good design for the natives without just changing their skin/hair/eye color. A lot of it came from the fact that the character possibilities suddenly became immense, as well: You could make the characters stronger, faster, more intimidating, with the abilities to fly or breathe underwater without making them mutants. On top of that, the designs are so fun to do!
A lot of good examples have been mentioned here (and I've read most of them), but I think there will always be some doubt in there that your readers will interpret it the wrong way and then drop the story once they realize it's something entirely different.