In a word...Yes. Looks do matter.
The question is, how much, and what are the consequences?
Ideally a person should be judged only by their character, and not their physical appearance. But it would be "wishful thinking" to think that this is always the case in the real world. However wrong this is, to deny it would make an already unfair situation even worse. And realistically, if children like what they see when they look in the mirror, they will lead happier and better lives than if they don't.
Now I'm not saying that looks are everything, because they're not. What I am saying is that it's important to appreciate the influence that physical appearance really has. Statistically speaking, more attractive people have advantages over less attractive people. They are accepted more, hired more, trusted more, appreciated more, and forgiven more. That's the cold hard truth.
"But wait, isn't beauty in the eye of the beholder?"
Actually, no. Studies have indicated that even very young children have a definite opinion of what is and isn't good looking, and they are surprisingly consistent. (Although very young children do not place a high value on looks, its importance will increase as they grow older, especially during the teen years.)
Consider this picture that was administered as part of the Simon-Binet IQ test in 1911. Even today, if you ask a child as young as three years old to point out who is "pretty", and who is "ugly", they will be able to pick the right one rather easily.
What's more, is that the effect seems to be universal. Children from all over the world, are remarkably united in their choices.
This indicates that the perception of beauty is instinctual, rather than learned.
"But wait. Not all of us are born a perfect10."
Trust me, I know this first hand!
"Shouldn't we love ourselves for who we are no matter what we look like?"
Oh yes. In fact loving ourselves is essential to living a happy and satisfying life. (See:Self-Image.) And when you love yourself, you are more likely take care of yourself, which includes maintaining your physical appearance. The good news is there are things that everyone can do that can make a big change in how we look.
Cleanliness - Simply being clean makes a huge difference.
Clothes - It's amazing how just what we wear transforms our image.
Hair - Hairstyle alone can drastically influence overall looks.
Figure - It's no secret that being in shape looks good.
Summary
It's important that we are not completely dependent on the approval of others for our happiness. And it's equally important to teach children to judge people on their character, and not their appearance. But like it or not, looks do matter. The key is to prioritize being attractive to please yourself first, before being appealing to others.