Yeah, that's exactly what my mums's attitude was. And it was the prevailing concept in communist countries. Sex was a circumstance of your birth but didn't tell you anything about your personality or what you could achieve. Biological essentialism, so to speak, was out the window. And it was a cool attitude, and a rare one too! especially in Thatcherite UK where gender was being used to sell the same thing twice (long live capitalism, eh). Where my mum came from that just didn't exist. Stuff was stuff and stuff was in one colour for everyone.
As to the rest, I've tried to square that circle many times, and believe it or not have changed my position on this significantly in a relatively short space of time (compared to other political viewpoints). Personally, I don't believe that this is circle that can be squared - precisely because, as I mentioned earlier in the thread, they are rooted in polar opposite philosophical theories. (materialism vs idealism)
So the best that can be done is compromise, but compromising on such a fundamental question of how reality and consciousness is formed is going to be frought. And so it's no wonder stuff gets punchy.