I always assumed it was defined by procreation - when we assign gender to individuals of a species - the females lay eggs/give birth, and the males fertilize them.

This breaks down in hermaphrodite creatures and creatures who change sex.

Hermaphrodites are both, creatures who change sex start as one gender and become another. I don't see a problem.

Why are these labels important to those who use them -- why bother with a "gender" noun and instead use a description of what your sexuality functions as?