Being fake and staged does sound par for the course since the producers said that they were inspired by "The Jersey Shore" to create the show. That means casting lots of drama queens/kings and putting them in contrived situations to make them scream and fight.
A while back I remember reading about a contestant who left the show crying because producers wanted them to urinate on camera in front of each other and hit each other in the face during the first few days of the shoot.
The whole thing with the guy saying that he won't sleep in the same room with a gay guy was probably engineered. During the audition process the producers probably deliberately looked for a homophobe and for a gay man so that they could assign them to room together and watch the drama ensue.
Them even having to be naked while working at Caliente isn't real. I've been there a few times and the staff wears clothes while they are on the clock; that's how you tell them apart from the other guests. I saw their casting notice and even watched their casting call, which was broadcast over the web. They deliberately screened out nudists since they were going for a fish out of water uncomfortable situation. It was mentioned in their casting call that they didn't want anybody with experience at nudist resorts or nude beaches.