It doesn’t seem very necessary but I’m not outright opposed to it. Sexual dimorphism is cool, but it isn’t super apparent in wolves. But then again, werebeasts in TES aren’t just the animal but bipedal, they’re a daedric creation which adds it’s own spin on things.

As long as it doesn’t make female werewolves less monstrous, I’m cool with it.

This is a tricky question. Let's try to be logical about this, not emotional.

A normal she wolf has several teats on her belly for nursing her pups, but Werewolfs usually do not have anything close to that. A werewolf still has a humanoid base physiognomy, because the transformation enlarged muscles, skin, bones and stimulates follicles to grow hair to mimic canine, but never removes anything. A transformation cannot simply delete a previously developed body part (think about the human appendix).

Applying that logic, a rudimentary, not prominent breast should be ever so slightly visible on female werewolfs.