It's funny that he brings up his ass, especially given what Chara asks you to do after a genocide run.

See, in witch hunting manuals from the middle ages, they describe a ritual called the Osculum infame, or the "kiss of shame." It was thought to be an initiation rite for would-be witches, who had sold their soul to the devil in exchange for power (like you do with Chara), and involved kissing the anus of a goat, or a goat-headed figure. The devil would then use this kiss to seduce the witch, because apparently Satan is super into butt stuff.

So yeah, Goat really is for sexual, but only if you do a genocide run.