Genesis 5:3

And Adam lived a hundred and thirty years, and begat Sheth, who had the likeness of his image and of his similitude: for before had Hava born Kain, who was not like to him; and Habel was killed by his hand. And Kain was cast out; neither is his seed genealogized in the book of the genealogy of Adam. But afterwards there was born one like him, and he called his name Sheth.

AND HE BEGOT A SON IN HIS OWN LIKENESS, AFTER HIS IMAGE. It is known that all who are born from the living are in the likeness and in the image of those who give birth to them, [so why was this verse necessary?] However, because Adam was elevated in his likeness and image in that Scripture said of him, In the likeness of G-d He made him, Scripture explains that his offspring were also in this ennobled likeness. Scripture did not state this concerning Cain and Abel for it did not want to prolong the discussion of them. It explains it, however, in the case of Seth because the world was founded from him, [Noah being his direct descendant]. Or it may be that because Adam was created with absolutely perfect form, Scripture relates concerning Seth that he was like him [Adam] in strength and beauty.

ויולד כדמותו כצלמו, Sheth was more righteous than either of his brothers, seeing that even Hevel had only offered his gift to G’d after Kayin had preceded him.

ויחי ארם, after Adam had lived on earth for 130 years, he begat a son in his image and in his form, as we have explained already. (1,26 where this term has been explained) This was possible now, since Adam, after having completed his penitence had become a thoroughly good person. It is possible to understand the word כדמותו as referring to Adam’s body reflecting the quality of his soul, whereas the meaning of the word בצלמו refers to his intellectual qualities. After he had done תשובה, Adam’s intellectual qualities also had fully recovered from the negative fallout they had experienced as a result of his sin. It is also possible that he did not recover these faculties to the full until the last tenth of his life on earth, seeing that the prophet Isaiah 65,20 describes people in the times of the Messiah as remaining adolescent until they attain the age of 100. Adam’s offspring also might have been in an adolescent state until they came of age at about 100 years old, and that is why they did not marry until then. Once they had matured both physically and mentally, they could be expected to reproduce so that their children could be described as being בצלמיהם בדמותיהם, reflecting the good qualities of their respective parents.
Our sages (Eyruvin 18) say that during all these 130 years that Adam had lived the life of a bachelor he was generating all kinds of spirits, demons, and the like, (whenever he had a nocturnal seminal emission, these emissions did not go to waste). The sages derive this from the emphasis in our verse that finally Adam “begat in his image in his form,” i.e. up until then he had involuntarily begotten inferior beings. [the Talmud implies criticism of Adam, who, though he flagellated himself in this manner, did not fulfill the commandment to be fruitful during those years. Rabbeinu Nissim, in the name of Rabbi Sherirah gaon, writes G’d had indicated to him at the time of his sin that henceforth his children, if any, would not be true reproductions, i.e. that he just like women sometimes who suffer from giving birth to malformed beings, would produce such malformed creatures. The matter is discussed in Niddah 24. Rabbi Yehudah in the name of Shemuel says that when a woman gives birth to a malformed being with wings, she is still considered as ritually as impure as if she had given birth to a normal human being.
While Adam was in a state of disgrace he was unable to sire regular human beings, but grotesque looking creatures with ugly faces, resembling demons. We know that people are in the habit of referring to such malformed human specimens as demons and ghosts. When Adam regained his former good standing in the eyes of G’d, and He lifted the curse from him, he was once more able to father children that could be described as בדמותו כצלמו, in his image.