Yes, of course, tons of homosexuals married and had children, royal and commoner, then and now. "Proof" of Sergei's interests are, as with most pre-1970's lifestyles, are well locked up in a closet. Hearsay among people who I know who were global travellers and elitists during the 20's and 30's have said "everyone" knew about Sergei. Empirically, Ella became more and more committed to her faith and religion, a common result of a spouse who is not the target of the other's affection. From all accounts of how they lived, their relationship was greatly platonic. Ella wanted to be near her sister, and probably considered marriage and all that went with it, secondary.
All that being said, she and W would have made a smashing couple. He with his pomp and lofiness and her with her subtley serene and intense beauty and manner. Semi opposites that could have created a massively impressive court. Had Ella been the Kaiserin, she very likely would have picked up the agenda of Vicky. She very much loved Vicky, and any children would have had a better relationship with their grandmother.
By the by, W is also not without rumors of being gay. In his case, he clearly met the challenge of producing a large family.