I always imagined they were born from the Earth and ground. Why not? They've been around since the beginning of all of Hyrule.

Pareidolia. That is to say, it's probably not related to their reproduction at all, but it's pointy and on what appears to be a chest so we assume they're nipples. As for what they actually are… tiny stalactites from sleeping on their stomachs over long periods? Protrusions of an underskin plate seen through a gap that exists to maintain flexibility since their skin is only capable of limited stretching? Rocket powered emergency weapons? None know. The mystery of the goron nipple is eternal.