Is it legal to own a small sole-proprietorship business that only hires heterosexual women employees?

It is almost certainly NOT legal.

1) Sex-based discrimination is never legal; except as below, a business may not hire only women.

2) While federal law does not protect sexual orientation, many states (e.g. NJ, NY, IL, CA) do--in those states, it is illegal to only hire hetrosexuals.

There are some very narrow, very specialized cases where sex may legally be taken into account: for example, say that a company is in the business of supplying attendents for women's restrooms and lockerooms in hotels and resorts. Since locker and bathroom attendents have to be the same sex as that of the locker or bathroom they are attending, in that case, the employer could discriminate (at least for the actual attendants, but not for "back office" staff) on the basis of sex. That's obviously not the norm.