1. The Lawful and Unlawful
Islam's view on Male/Female interaction and Celibacy

2. Islam prohibits fornication and adultery, and blocks all ways leading to them which is why great emphasis is placed on separating the sexes. However islam is also practical and being so there are exceptions to the above.
For example a woman may serve her husband's guests in his presence as long as she adheres to the Islamic standards in her dress, movements, and speech.
They will naturally see her and she will see them, and there is no harm in this as long as there is no danger of involvement on either side. The permissibility of this is based on the following Narrated from Imam Bukhari:
“Abu Usayd al-Sa'adi invited the Prophet and his Companions to his wedding. The food was prepared and served by none other than his wife, Umm Usayd. She had soaked some dates in milk in a stone pot overnight. When the Prophet had finished his meal, she mashed the dates and brought the drink to him.”

3. Shaikh al-Islam Ibn Hajar commented that
"From this hadith we conclude that a woman is permitted to serve her husband and his male visitors, just as the husband is permitted to serve his wife.
It is evident that her serving the visitors is allowed only if there is no fear of temptation and if she is properly dressed; if the wife is not properly dressed (as is the case with a majority of women in our time) her appearing in front of men is haram."

4. We must be aware that in regulating the sexual drive Islam has prohibited not only illicit sexual relations and all ways which lead to them, but also the sexual deviation known as homosexuality and what leads to it
Living in an age in which homsexuality is becoming the norm, we have to take extra precautions to avoid it. This is why it would be better for women to cover even amongst other women and the same for men
After associating partners with Allah, this is the worst sin one can commit. So bad a sin it is that Allah destroyed an entire nations for this:
“And when Our messengers came to Lut, he was grieved on their account and did not know how to protect them. He said, 'This is a day of distress.' And his people, who had long since been practicing abominations, came rushing toward him. He said, 'O my people, here are my daughters. They are purer for you, so fear Allah and do not disgrace me in front of my guests. Is there not a single upright man among you?' They said, 'Thou knowest well that we have no right to thy daughters, and certainly thou knowest what we want.' He said, 'If only I had strength to resist you or had some powerful support!' Said (the angels) 'O Lut, truly, we are messengers of thy Lord; they shall not reach thee....'(11:77-81)

5. Not only does islam prohibit and close the door to what can lead to illicit and illegal sex, but on the other hand it is opposed to suppressing the sexual need and encourages marriage while prohibiting celibacy and castration
As long as he possesses the means to marry, the Muslim is not permitted to refrain from marriage on the grounds that he has dedicated himself to the service or the worship of Allah or renunciation of the world.
The Prophet noted a tendency toward celibacy among some of his Companions. Declaring this to be a deviation from the straight path of Islam and a rejection of his sunnah, he thereby rid Islam's conceptual framework of such a Christian notion. Abu Qulabah narrated
"Some of the Companions of the Prophet decided to relinquish the world, forsake their wives, and become like monks. The Prophet told them with asperity, People before you perished because of their asceticism; they made excessive demands on themselves until Allah brought hardships on them: you can still see a few of them remaining in monasteries and temples. Then worship Allah and do not associate anything with Him, perform the hajj and the 'umrah, be righteous, and all affairs will be set right for you."
( 'Abdur Razzaq, Ibn Jarir, and Ibn al-Mundhir)

6. Abu Qutabah said the following verse was revealed concerning them:
“O you who believe! Do not make haram the good of things which Allah has made halal for you, and do not transgress; indeed, Allah does not like transgressors.” (5:90 (87))
Mujahid narrated,
"Some people, including 'Uthman ibn Maz'un and 'Abdullah ibn 'Umar, intended to renounce their wives, castrate themselves, and wear coarse clothing. Then the above verse and the verse following it were revealed."
(Reported by Ibn Jarir in his Tafsir.)

7. It is reported by al-Bukhari and others that three people came to the Prophet's wives and asked how the Prophet conducted his worship. When they were told about it, they seemed to consider it but little, saying:
"What a difference there is between us and the Prophet whose past and future sins have been forgiven him by Allah!" One of them said, "As for me, I will always pray during the night." The other said, "I will have nothing to do with women and will never marry." When the Prophet heard about this, he explained to them their error and deviation from the straight path, saying, “I am the one who fears Allah the most among you, yet I fast and I break my fast, I pray and I sleep, and I marry women. He who turns away from my sunnah has nothing to do with me.
S'ad ibn Abi Waqqas said,
“Allah's Prophet objected to 'Uthman ibn Maz'un living in celibacy. If he had given him permission (to do so), we (others) would have had ourselves castrated. “

8. Addressing the young men of all times, the Prophet said:
“Young men, those of you who can support a wife should marry, for it keeps you from looking at women and preserves your chastity.' “ (Reported by al-Bukhari.)
From this statement some scholars have inferred that marriage is obligatory for the Muslim who is able to support a wife and that the avoidance of it is not permissible, while other scholars add the further condition for its obligatoriness that he should be afraid of falling into sin.
In fact, it is not befitting that a Muslim should refrain from marriage out of fear of poverty or of not being able to meet his obligations. He should make every possible attempt to find employment, seeking help from Allah, for He has promised to help those who marry in order to protect their chastity and purity. Says Allah Ta'ala:
“And marry those among you who are single and the virtuous ones among your slaves, male or female. If they are in poverty, Allah will enrich them out of His bounty.... “ (24:33)

9. Also the Prophet said:
“There are three who have a right to the help of Allah: “
The one who marries out of the desire to live a chaste life,
The slave whose master has agreed to his buying his freedom when he wishes to pay the sum,
And the one who fights in the cause of Allah.
(Reported by Ahmad, al-Nisai, al- Tirmidhi, Ibn Majah, and al-Hakim.)

10. So thus we learn the following:
Although Islam closes the door to what can lead to the haram in regards relationships between the sexes, the religion is practical as long as the laws of dress and behavior are displayed.
Allah makes his laws as a means of protecting us from things such as homosexuality and the likes
Although Islam is strictly against illicit and illegal relations, it does not allow for celibacy. Instead marriage is very much encouraged and taught to be a means of protecting onself from falling into sin