Pure bloods are practically a shadow of what the Sith species were. So, I was wondering, that since the pure bloods are human, with enough DNA to have Sith traits, could they have children with no Sith traits?

I would imagine so since most in the Empire with Sith ancestry (going by how in the foundry Hk-47 mentions that 99.7% or something along those lines, in the Empire have Sith DNA but the actual red skinned pureblood look is considered rare) don't show the red skin and facial horns etc.

 

Seems like the human traits are more "dominant" over the Sith ones since the Purebloods look to be dying out slowly.

Yes, they not only can but if they paired with a Human then it would ever likely be rather common. A Pureblood/Pureblood union having a human looking child would probably be grounds for shame, but it would likely be common enough that infidelity wouldn't be a consideration on why. A Pureblood/Human one would likely be expected to have more human-looking children.