I imagine that Tywin knew about the incest babies, too, but I don't think he could let it stand if someone confronted him about it.

You never know with GRRM. The line of succession of House Caron of Night-song might alter the entire politcal landscape of Westeros. XD
Oh, that's weird. \: I mean, I might think "why did they even introduce this character and build him up..." but I wouldn't hate him for not living up to his reputation. PEOPLE ARE WEIRD.