@ArtistErin This is kind of a loaded topic, and I'm afraid I might have more questions than answers here, but I'll share my thoughts. I've wondered the same thing as you. I know the publishing industry here in the United States at least claims to be trying to broaden the people represented in our literature. There is also a movement to try to introduce the work of authors and illustrators from previously underrepresented groups. And yet all of us are told to represent diversity in our portfolios. It seems like a bit of a mixed message. Shouldn't we be illustrating what we know best and have experience with?
But that said, I think it is possible to represent diversity in our art in a way that is (mostly) non-offensive. (There's always going to be someone somewhere who's going to take offense, even where non was intended.) I think avoiding obvious touchy subjects and stories helps. In the end, kids are kids, and I think it's fairly easy to find ways to include children of diverse cultures and backgrounds. Children everywhere are fascinated by things like sticks and bugs and animals. They like to play and have a good time. The experience similar fears and joys. I think if you're illustrating along these lines, you'll be fairly safe.
I would love to hear other people's thoughts and perspectives on this subject!