I read that the Sivalingam is actually an act of sexual union....the sign of fertility...it is the phallus of siva in the womb of Shakthi...
have you heard of this veiw point???
Ramanan to answrt your question to see if the charecters in PS saw sculptures as art or devotional structures I am afraid the answer is as devotional objects...It was the veiw of Sembian Madevoi ,Kundavai and Even arulmozhi varman....He says he wants to give the same importnance to Hindu gods as the srilankan kings after seeing the Budda statues in Lanka....He says Siva is the lord of the universe and he cant reside in small temples we need to built a big temple to fit his strature...
Moreover it was during Chola period the wooden and brick temples were changed to Stonework ...Katralli.. there is mention of it in PS and moreover that is greatness of the Chola Kings they built Granite monuments for the gods but lived in Sunnambu Aranmanais which havent stoood the test of time.
Regarding your qn.. I read in some article (vikatan? or in rediff? or chennaionline?) that the concept of Sivalingam being a sign of fertility was introduced by the foreigners.. No offense meant against foreigners for their perception as they are mostly unaware even to grasp the basics of the religion, but we should be cautious in accepting such interpretations. The article went on to discuss (convincingly) in length citing why that argument should not be taken seriously.
The best way would be discuss with pundits or educated (w.r.to religion) aanmigavaadhis..
A couple of add-ins on Sridhar's and Jayaraman's mails. Lingam, as a phallic symbol, may be a "western" concept; maybe not. An article on an Indian site where the author asserts that lingam is a form of sexuality: quote-Shiva mythology, in fact, is a rich source of Indian thinking about sexuality, social relations, ritual, cosmic process, and metaphysics. The Male-Female union in the form of