Maybe phallic worship outside of SD exists somewhere, I really don't know. But not in SD.
Hindus definitely aren't prude. If some are today, its because of foreign invasions. The introduction of the sari top (blouse) is an example. A few hundred years ago it didn't exist. But then either Islamic or maybe Europeans came, and because of THEIR prudishness, got the women to cover up. That happened everywhere the Europeans went: Africa, Hawaii, Tahiti, North America. It was like they had breast phobia.
Another proof is that it takes quite the imagination actually to turn the lingam's shape into a phallus. Its nowhere near long enough, it has no phallic markings, and its upright.
There are also countless naturally formed lingams with no base from the Narmada River that most certainly don't resemble phalluses. There are also many swayambhu lingams. The entire Arunachala Hill is and others are often referred to as large lingams. Swayambhu lingams never resemble phalluses. Why? Because they are just marks.
Things get greatly distorted. (No pun intended).