Presently I'm working on a short novel about a modern-day wizard who gets changed (for about 18 hours each day) into a St. Bernard by a witch's curse. In the process I have to decide, as with any shapeshifter, how much of his human intelligence and personality he retains in animal form. In a romance, another question to deal with is how much and what kind of attraction, in this form, he can feel toward the heroine without verging on bestiality.
In one of my favorite werewolf stories of all time, Anthony Boucher's novelette "The Compleat Werewolf," Prof. Wolfe remains completely human in mind when he transforms, but with the added advantage of a wolf's body and senses (plus supernatural resistance to any non-silver weapon). I love the humor of Wolfe's adjustment to his new condition. When I used this story as a partial model for my werewolf novel, SHADOW OF THE BEAST, the editor disliked the light touch (he wanted darker horror) and vigorously objected to having the heroine, as a wolf, think like an ordinary human being. So I altered my presentation to show her drawn deeper into the lupine experience of the world. As a beast, she can't read (the editor thought a wolf reading street signs was too silly), she doesn't think abstractly, and she has trouble focusing on whatever plans and goals she fixed in her mind before shifting. As for sexuality, she finds the process of transformation intensely arousing, but she changes back to a woman before doing anything erotic with the hero.
For what I'm thinking of as my "dog wizard" story, an erotic romance, I go for a lighter touch. It's fun to play with the predicament of a character who thinks like a man while wearing a dog's body and senses. He finds his occasional lapses into canine behavior somewhat embarrassing. While a dog, he enjoys the heroine's scent and touch, but actual arousal occurs only when he's human. In sleep, he uses the residual traces of his magic to enter her dreams and seduce her; in the dream realm, he's human.
Nancy Springer's YA novel THE HEX WITCH OF SELDOM features a man who incarnates the archetypal figure of the outlaw, trapped in the shape of a horse. A teenage girl buys the magnificent stallion and loves him fervently in the classic manner of girl-horse devotion. When she discovers his true nature, she still loves him passionately, but there is no hint of a physically erotic attraction between them. There is no hope that they can be together as a couple. Once she helps him get permanently restored to his true form, he has to go back where he belongs. It's a great story with mythic overtones, highly recommended.
In my erotic romance novella "Dragon's Tribute," the dragon has the power to transform into a man. He makes love to the heroine as a man, as well as when they're both in dragon shape. Also, as a dragon he uses his tongue and tail to satisfy her while she's in woman form. The editor allowed this activity because he's an intelligent creature and not any kind of real-life animal. Here, of course, there is no question of whether his mind remains intact in either of his forms; a dragon is superior in power and intelligence to human beings.