I'm having some of the same issues as well. Along with posing of the penis, I also cannot figure out how to remove the tf2 model's boots, and assorted accessories. I believe there is a way to do this but I am at loss for a solution. On some of the models its as easy as changing a certain bodygroup, but some of the bodygroups don't have the option of selecting "<none>" for the accessories.
Going back to the original question, I have the "show hidden controls" selected, and still there is no bone or rig set to be found for the penis.