Was Sailor Moon edited for the English version, to show less in the transformation when they are naked? Was it originally meant for children?
In general, Sailor Moon was heavily edited for the US release as detailed by fans for example here. In particular nudity was avoided as exemplified below.
The source of these images is this comparison between the US and the German version. While the German version is not completely uncensored (see the linked site for details) it is almost equal to the Japanese original and does not have censorship of nudity.
Regarding the transformation scenes in particular: Many sites claim the US censorship manifested itself in removal of the breast outlines, however all examples I find on youtube look the same to me. The two sites mentioned above also say that the only change is a speed-up of the transformation - likely to fit the overall episode runtime due to other edits.
Other changes include the removal of violence in particular against children and gender changes as not to display homosexuality. This all pertains to the original US release, while subsequent ones apparently stayed more true to the Japanese original.
To address the second question, as Skullclutter already mentioned Sailor Moon is considered a shōjo series and therefore aimed at young women.
Though I watched the original English dub when it first aired on TV in the U.S., I do not follow any of the details about it, so I will not attempt to answer the first half of your question, but I can answer the second half.
Was it originally meant for children?
Both the manga and the classic 90s anime were primarily aimed at elementary school-aged girls (whereas the reboot Sailor Moon Crystal was not aimed at children). The easiest evidence for this is the kind of commercials that aired during the broadcast, which were very child-targeted. Thanks to the efforts of Sailor Moon otaku, you can watch many of these TV commercials in YouTube, such as these ads for kids' shoes, eye drops for red eyes after swimming, and toys. You can clearly see from the age of the child actors in the commercials that the target audience was girls of their ages: the lower grades of elementary school. In other words, if the series had been aimed at pre-teens, teens, or women, second graders wouldn't be advertising the merchandise (how many high school students would decide to go out and buy something because a third grader told them to? Usually, the actors cast are the same age or older than the target viewer).
Shoujo is largely aimed at elementary schoolers, not at teens or women. The magazine that Sailor Moon was published in, Nakayoshi, is specifically aimed at one of the youngest age brackets amongst shoujo manga magazines (the only main shoujo magazine with a younger target audience than Nakayoshi is Ciao, and they largely overlap in target demographic).
Proofs from this answer:
Evidence that the targeted age range for most shoujo manga is young elementary school age can be taken from:
- the age of the real-life models shown the photos on pages about fashion/hair/make-up or modeling next month’s advertised furoku. In the big three magazines (Ribon, Nakayoshi, and Ciao), they are always preteens.
- the age of the male idol groups featured on pages containing news or interviews with idols -- in the big three these are usually the ones comprised of younger boys such as Ya-Ya-yah and Sexy Zone.
- the type of furoku [freebies] included with magazine issues. In Ribon, Nakayoshi, and Ciao, the bulk of furoku can only be used by little kids: a Japanese high schooler couldn’t be caught dead wearing them. The furoku produced in recent years have increasingly become "kiddie" items. . . .
- the fact that only 1) young kid characters, 2) very childish characters, and 3) hardcore otaku characters in anime/manga are ever shown reading a manga magazine. Tsukino Usagi in Sailor Moon and Gouda Takeo in Ore!! Monogatari are shown with manga magazines in their bedrooms, because it shows that these characters have the mental age of an elementary school kid despite being high school freshmen. Manga magazines aren't found in the bedrooms of mature and average teen characters, just as most real-life Japanese teen girls do not read manga.
Sailor Moon was targeted at children, although the inclusion of short-skirted sailor uniforms was a suggestion by the mangaka Takeuchi Naoko's male editor at the publisher Kodansha, Fumio Osano (known by his nickname of Osa-P), to also pull in some adult male fans.
The content considered acceptable for kids in Japan differs from that of other countries. Nudity is generally a non-issue, and there is a long-standing tradition of nude transformation sequences in mahou shoujo (a sub-genre of shoujo targeted at elementary school girls) since the 1970s. This was not originally intended to be titular -- many of the classic 70s magical girls were pre-pubescent, meaning that no cleavage or curves were present at all during their nude transformation sequences -- but more so these sequences were to clearly demonstrate how the transformation magically worked (old clothes disappear, new clothes appear). In contrast, the earliest classic mahou shoujo who was simultaneously targeted at young girls while being intentionally sexy for adult male viewers, Majokko Meg-chan, showed off her body with panty shots, various stages of undress, and coquettish winks throughout the episodes apart from a transformation sequence.
Also, from this answer:
Not all nudity in manga and anime is considered sensual or sexual. Just as the Japanese public baths (onsen and sento) do not innately bear any association of nudity with sex among the general population, nudity can be included in illustrations that are not intending to have any sexual connotations. Historically, the Japanese were surprised by the foreigners who arrived on their shores and balked at the public baths, since the Japanese didn't view them as related to sexual interest. In fact, nudity can in some contexts connote purity, as in the final episode of Bishoujo Senshi Sailor Moon, in which the protagonist fights her final battle in the nude, her pure heart able to
reach and connect to the villain's and set her free from being possessed by evil.
Neither the villain, nor any of the onlooking supporting characters, particularly pay attention to her nudity during and after the battle; even when she is subsequently hugged by her boyfriend, there is no sensuality present in the depiction.
(The reason that transformation sequences increased in length [thereby extending the number of seconds of nude footage and the number of "camera angles" during it] was due to the fact that every frame of the anime needed to be drawn by hand. If the animation company prepared a few sequences that could be reused in just about every single episode [appearance, attack, transformation] that cut down on the number of minutes of original animation needed to produce for each episode. Now that most anime is digitally animated, this is virtually no longer necessary, but fans came to expect those transformation sequences in the mahou shoujo genre, so we still see them in current and recent anime even though they no longer perform that formerly important practical task.)