suspended reality

You do pose some very good questions and I agree that you do have to suspend some disbelief in order to really enjoy this movie like any other movie that's based on fiction and not fact, although I do believe that the events depicted in this movie are highly plausible especially since we've seen and heard about other incidents that seem to be even more far-fetched but were actually true and actually did happen. Example, that crazy guy in Germany that kept his own biological daughter locked up in a basement and fathered children with her. That to me was insane and might not have been believable if I saw in a movie but the fact that happened in real life serves as a perfect example that anything can happen!

In response to your questions, I believe that Jimmy most likely all along had his doubts about what was going on in this strange relationship. I think he did suspect that those were his sons which was hinted at in the scene where they show a close-up of him staring at the two boys. I think the scene of Ray in the bathroom is more for his own realization that Ray was not his real father. Remember, we are being introduced to a time of awakening of sorts, Jimmy is older now and although he has been brought up in this twisted situation, he is starting to see things for what they really are. Keep in mind as messed up as this family seems this is the only family he's ever known. He has finally reached the age where he's old enough to actually do something about it.

~What if this is as good as it gets!~

In movies older children play younger children all the time. This is because its easier to work with older children. Therefore it is entirely possible that the kids were closer to 4-6 than 6-8 in the story.
That would put the first conception at the age of 13. This is completely believable, considering that average of of sexual matiruty for males is between 11 and 13 years.
Therefore inception is very much possible if the manipulation happened for a long time.

As for the pregnancy part, you may not know it, but giving birth can leave permanent damage to a woman. Sometimes such damage means she is incapable to conceive any new children. The family didnt look like it was visiting a doctor regularly to check for pregnancy, and it is very likely that this was the case that was simply not addressed, considering how they hid the fact that he was the father from him.

His lack of suspicion is indeed baffling. but thing is reality is sometimes baffling and peope are sometimes blind. Ive heard of women who had lowers behind husband backs for decades to the level of actully having sex in the other room while the husband sleeps, and yet they only found out over a decade later. Sometimes people are blind.

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Applied Science? All science is applied. Eventually.

I have the impression that the reason Kate hasn't gotten pregnant in awhile is that she and Jimmy haven't been forced to have sex for quite awhile. I'm not sure the exact reason why Ray might not have done this for awhile, but my impression is that the last time Kate and Jimmy had sex was before his relationship with Tracy started. That was 2 years earlier (both of the young sons seem well older than 2). I have the impression because the act of forced intercourse with Kate that night seems to introduce conflicts in Jimmy's relationship with Tracy that didn't exist before.

At one point Tracy asks Jimmy why he hadn't told her about the situation with his mother (or the woman who appears to be his mother) before. There are two good reasons why he didn't. First, until the night depicted early in the film, he hadn't been unfaithful during his relationship with Tracy. His prior acts, although some would call them taboo (esp if Kate truly was his mother), occurred earlier than that. Second, until he realizes that Ray was wounded and lost his penis, he has no way of knowing whether he is the father of the boys.

He may, however, sense on some level that his brothers are more than just his brothers. In a very early scene, Tracy observes that he seems remarkably concerned about the kids.