Telepathy => if I understood correctly, telepathy is an exchange of pics, cause we humans talk in words, but our thoughts are a mix, right? I think, telepathy should use a pic language (as in dreams). If we look inside ourselves => we hear/feel/see a cacophony of different voices, thoughts, colours, emotions. So, even a friendly and open approach can have undertones of fear or caution. I think, a telepath has a very difficult life in sorting out tendencies, hidden stuff (the thinker doesn't know himself). So, it depends on Lupo's ability how deep he can "see", feel, take up and evaluate.
But author and audience always are human - can one distance oneself from that - and more important; could one alienate the reader from his human view and expectations; and, if so, should one?
I say yes - just from my view as a reader => I love being surprised, teased and being lead astray by the writer and his/her world of imagination. One thing: I was surprised and wondered about Lupo's non-reaction of being touched, I became curious => why? Will the story explain further on? So, this part caught my attention, draws me to the char.
Dragon gender => hmm, I think a dragon is a dragon in the first place. Their life span is so long compared to humans, they need not fall for a gender trap and gender cliches - though they need gender to reproduce themselves. I personally like female dragons (sure, I know Michael Ende <drool> and his female dragon <img src="/ubbthreads/images/graemlins/winkwink.gif" alt="" /> ) If I understood your Lupo so far correctly: your dragon there represents the element fire, right? So, this is simply an old power, a way to approach => gender unspecific IMO. Now, why a gender then? I think it is easier for the reader to identify "he/she" instead of the distanced "it". If I take dragons as ancestors of reptiles => they all had gender: crocodiles, lizards, iguanas, chameleons etc. And zoology states gender behaviour clearly. In Lupo's case => so far I see the fiery element. I think it might be nice, if your creature takes up everything in a Lupo way => unique, as something new.
Glance, take the gender you feel comfortable with, where you feel you can write without wrecking your head to come up with a consistent char. Every human has animus/anima. So, why not let Lupo react in a unique way? sometimes male, sometimes female?