There are many good and bad aspects to Habbo, just like any website. Unfortunately when looking at whether it is a suitable game for children, the bad aspects are superior. You have to be at-least 13 to play Habbo. The site is aimed at teenagers which is why that age limit is set.
As for Habbo being Educational, it's a chat room based site, obviously it's not about educating, it's supposed to be fun!
There is violence in Habbo, but only in roleplay where users will say things such as *Kicks in head*. Usually these people are immature, so you just laugh at their foolishness. Most Roleplayers stick to rp rooms though. There are all kinds of roleplays varying from school, adoption, vampires, doctor who, army and FBI.
Sexual behavior is ALL over this site. If your child is mature, they will ignore it. There are hundreds of "dating rooms". For example; 'HOT SINGLES HERE!' or 'Gay,bi,les,trans'. I myself have always stayed well clear from these rooms. The people in them are either 12 or 50 and desperate for an "E-boyfriend/girlfriend". Some of them like to treat their internet relationship like a real one, going to Habbo resturants together or adopting a Habbo "baby". Which is where another user pretends to be a baby and talks stupidly. Others want internet relationships to have cyber sex and often shout things out in the room like "Add me for cyber". More often that not these people will go off and do their thing privately.
Language on this site is pretty bad. I actually used to be really shocked by how nasty some of the people on here are. If you are new to the site, don't understand how to something or spell something incorrectly you are usually called a "noob". Also if you don't spend your real life money to buy coins the vip members are horrible to you (most of them..) They rooms that say "vip only" and have "vip areas" where norms aren't allowed.
As far as drinking, drugs and smoking goes the only one that would be considered an issue is drinking. There are many pubs, clubs and nightclubs where you can double click drinks machines or be given a drink and the avatar will drink it. However none of these drinks are actually alcoholic drinks. The kids on here like to think they are getting so drunk, but if you click on a person with a drink, it tells you what they are drinking. Normally it'll say something like 'Carrying: Juice'. Sure, maybe it'll make your children think they can get drunk on juice..
At the end of the day I think if your child is mature then they won't visit the rooms for sex. It is a fun site for playing games, meeting friends and having a virtual life!
I have played this game for 6 years off and on and I can honestly say I haven't been affected by it in a negative way.