Yeah! You've hit the nail on the head. You only need to go as far as to ask what separated The Muppet Show/Muppet Movie from Sesame Street.
I like the abstract, deliberately trippy stuff they used to have on the show. It was quite psychedelic sometimes in it's early heyday. Bring back the BAND for Pete's sake, too! I love the Mayhem rockin' out!
Watching the 1st season DVD reminds me of how funny the 'violence' could get, too (they came close in IaVMMCM). Not negative violence, but the funny stuff - heads exploding for no reason, monsters eating little guys, Crazy Harry (terrorists ruined that one I guess)! It does not 'damage children'. It's funny.
Kermit or Piggy flirting with female or male guests stars making love triangles, real money problems (again - another reson why I loved IaVMMCM), and real physical danger.
All of these elements were already in the Muppet formula in the 70's. Most of is was washed out by the insipid political correctness period called the 90's leaving what we've got now.
I say to **** with it, just call it PG, no need to go any farther than the old days with it and poof! Zany, carefree Muppet Magic again!