Does the expression has any particular connotations when used in sentences such as 'they'd sexed up the report'? Does it fit a formal context?
I've no problem accepting these things (due to the properties of human language), just wondering! But I know it's a bit risqué in non-native environments since they haven't often heard it before.
I've heard it used many different ways. But in general, "sexed up" means something has been modified, usually in a non-substantive way, to have more appeal to the beholder. In a report (your example) that could include adding colors or flamboyant fonts or eye-catching graphics … none of which would add value to the actual content.
The word "sex" has found many applications for obvious reasons. We speak of people as being "sexy" of course, but I've also heard it used to describe cars, boats, and even weapons. How a weapon could be "sexy" eludes me, but to a gun collector I suppose it might make some sense.