My experiences with second life might give me a bit of insight.
For starters, the default human avatar is aids. Many furry avatars have good human proportions.
Some furries can be aesthetically pleasing, even kind of hot. It's still strange though. It often feels a bit like "why could I not be looking at a human instead?" unless they bring something to the table like sharks. I'm a huge fan of shiny, skintight clothing, and sharks have smooth, shiny skin. Still doesn't always work for me.
I find that most furries are either two categories. There's the kind that are seriously mentally ill (often, but not always, autistic) and have major problems with interacting normally with people. Then there's the kind that are less mentally ill or even "normal". They wear those avatars because they want to stand out a little, and they probably aren't struck by furry bodies as being weird.
I personally feel that I'm not a furry. But I'm still drawn towards the latter crowd, because they, even though they're weird, are usually really nice and socially apt. I imagine you have to be, if you're dealing with tons of crazies all the time. And hell, there's that sense of belonging too.
I feel that, while it's not a strictly sexual thing, there is a level of sexuality inherent in it. But then, so is there in being human. We humans generally like sex and porn. Only makes sense for it to translate to this.
And yes, that thing about "projecting human traits onto animals" is true. It's a bit like racism, only completely true. People chose what animal they want to be. Different animals have different traits. Bunnies are timid. Sharks are usually aggressive and energetic. But there's also stuff like how huskies for some reason attracts the most autists. Same with dragons. There's like, a good side and a bad side to each animal, and the traits those sides carry may contradict.
Enough of a rant about such a silly thing, hope your curiosity is sated.