I think they can be sexy, it just depends on the scenario. I find that most often, belly button jewelry is too big, and it blocks the view of the belly button. This for me is a let down, since it kind of defeats the purpose. Dangly jewelry is even less appealing, as it is way too distracting, and in my opinion looks a little trashy.
However, if the jewelry is really small, and you can still see the navel well, I actually sometimes enjoy them. They can be neat when they are like that, so I can get behind it.
Here is a good example:
I also think when it is an actual ring, and not a bar with two studs on each end, it is sexier as well. Kind of like what Fiona Apple has:
Sadly though, most that I have seen are too big and not my thing. I am glad that my girlfriend does not have her button pierced, nor does she have any interest in doing so. I would never object if she did, since it's her body and her choice, but I count my blessings that she doesn't want it.
Now true navel piercings are interesting. I am not sure how I feel about those, sometimes I love seeing an outie with jewelry through it, sometimes I don't. Any thoughts?
