The real question is if he's capable of doing so.
No he isn't, you can't just create a human with a dojutsu you don't have, it's like saying he can create a child with a RinneSharingan. In addition, he didn't expect which powers his children would have which means he didn't create them like the bijuu, otherwise he would have know what abilities they would have
He specifically refers to passing down his genes when talking about them which means he had *** with someone because that's how you pass down genes, through reproduction.
He also says Indra was powerful by
birth, keyword being "
birth" which suggest he was born and not created, and finally he compares Naruto to Ashura by claiming they both came from strong parents. Hagoromo had a child with a human and it's not a surprise because he loved humanity.
The thing is he mention then inheriting his chakra and what not but that's not how genes work. Look at Boruto and Naruto, see the resemblense? look at Sarada and Sasuke, See the resemblense? Now look at Hagoromo compared to indra and Ashura. like bro, did you even smash or did you create?
Indra inherited his strong chakra
genes, the genes he passed down to his children were responsible for the chakra they were able to produce. And genes can only be passed down through reproduction.
Look at Naruto and Minato, do they look the same ? No. Look at Hiruzen and Asuma, do they look the same ? No. Just because they're his children doesn't mean they're supposed to look identical to him, genes vary a lot.
The reason they don't look like Otsutsuki is because he had a child with a human. They got a human appearance from their mother but the chakra of their father.