"Red Nails" is an ... interesting ... choice of story to do as an animated film. It is possibly the darkest, grimmest Conan story Howard ever wrote, sort of a "Fall of the House of Usher" meets She, with a bit of Deliverance thrown in for extra creepiness. Even if you excise the scenes of quasi-lesbian sadism, you still have an insular, inbreeding society collapsing in on itself in a particularly bloodthirsty manner.
I half wonder if maybe it was chosen because it was one of the few Conan stories that actually has Valeria in it, as opposed to the Valeria/Bêlit amalgamation in Conan the Barbarian. Other than that, I'm not sure why it would be the piece chosen for this venture. I would have expected "The Phoenix on the Sword", Hour of the Dragon, or perhaps "People of the Black Circle" -- more typically action-oriented stuff, rather than the dark psychological stew of "Red Nails".