It's basically a genre , used mostly for Manga / Anime alike. It basically describes the portrayal of very suggestive images , mostly involving women , but not necessarily naked or being in the levels of ''porn'' , it's just a ''tease''.
It's not classy at all , and it's directed mostly to males with these kind of interests. People who have waifus and all of that mostly are associated with this , but not all since tastes are in diversity .
Basically , sexualizing a woman to please the male crew . A good example of this is DOA mascot , Kasumi. Then again , since Kasumi was literally created for this purpose (to be fanservice) then it's generally accepted .
Characters with a very innocent and modest nature such as Princess Peach , Rosalina , Zelda etc often suffer from this , even when they are not intended to be sexualized ; it's just because they are female.
It goes so far , to the levels of ridiculous , like sexualizing characters like Toadette , just because they are female.
There's literally no female character that doesn't suffer from this , even if they are literally dressed like a nun.
There's a fair few incorrect and horribly biased points you're making here:
-Ecchi doesn't mostly involve women. Yaoi (male x male) is one of the most popular forms of ecchi, and it's actually more popular than Yuri (female x female). It should also be noted that adult females actually make up a higher population of the video game/anime/nerd culture market than males do as well.
-I don't get what you mean by "it's not classy at all". That really depends on the subject matter and the portrayal. Yes, there is ecchi that delves into questionable or sometimes outright horrid (IMO) fetishes like minors, vore, tentacle stuff, and non-consenual groping and such. But most of it is just an of-age character posing or even embracing their own sexuality. There's nothing "not classy" about that. It's the exact same thing as a picture of a supermodel, only it's a fictional character and not a real person.
-Kasumi isn't just "for the male crew", she's actually very important to the story of DOA and probably has one of the most respectable, non-sexualised portrayals in the main DOA games. Similar to a character like Bayonetta, she's sexy and what not and she can wear risqué outfits, but this can be considered a positive fantasy for women (much like how playing as a Ryu Hayabusa might be for men - might I add that all of the male characters can wear swimsuits in DOA now, as well as the females. Tekken is the same too).
-I don't know why you included Princess Peach in your example because Nintendo has blatantly sexualised her on many occasions, she literally exists to be a fan service character at this point. She wears an incredibly short skirt for the sports games with her legs fully exposed, and many of them have her panties and almost totally bare butt modeled in (I would post images if it were appropriate for this forum but I don't believe it is), Melee and Brawl also give her big bloomers, her signature move in Smash Bros is
attacking with her butt with an explosion/love heart effect coming out on contact, her personality in a lot of games is portrayed as cute, flirty, and teasing, she plays the role of an object to be saved in most games, the Paper Mario games have had gags about her being "nude but invisible" and being captured by an otaku with the player able to engage in a dating sim gag with her, and then not to mention promotional material like this that goes as far as to totally exaggerate her proportions into what's effectively Betty Boop proportions:
As for characters like Zelda and Rosalina, they aren't sexualised by Nintendo really (Rosalina is a little bit, though), but they have very attractive figures and beautiful faces and what not, so it stands to reason that there would be teasing fan art of them (with Rosalina in particular, her amazon height, heavy/power classing in games, space theme such as the "cosmos beneath her gown" in Smash, and her motherly aspect give people a lot of "unintentionally sexy" aspects to work with in fan art. Also the fact she wears a pregnancy/maternity gown normally made people want to imagine what she'd look like in something else, but the biker outfit and the tennis outfit have sort of left very little to the imagination, and she has a tall yet very voluptuous and attractive figure).
-When it comes to character like Toadette, most lewd art of those characters is either tongue-in-cheek and part of some weird joke (meaning it's not really meant for arousal), or it's a more "humanified" version of the character which somewhat mitigates the abstract idea of those characters being portrayed in a lewd way.