Re: Physical contact vs. "no-touch" policy
We've got all adults or teens in our aikido classes. It's of course very physical, but I've never felt touched inappropriately. Accidentally, yes; but I wear all the appropriate layers including my nice thick gi so I don't think much of it. Occasionally, new male classmates will be afraid to touch me; but they generally get over it fast once they know I'm not going to freak out. Ignore accidents and it's less embarrassing for everyone; but if I ever thought something was inappropriate not accidental, you can be sure I'd say something about it!
If we have a new classmate who's having trouble with something, I'll explain and demonstrate and if that fails will physically move the person unless the person shies away or otherwise indicates s/he doesn't want to be touched.
I help teach kids karate, not aikido. With younger kids, you've got to move their hands and feet and sometimes turn their shoulders or they just don't get it. Once they're teens, I explain and demonstrate without touching -- teens, I've found, are some of the most body-conscious people and they're often not comfortable in their skins yet.
When I started coaching kids in karate, I never touched them. But my Sensei told me that sometimes you just can't get the littler ones to pay attention if you don't touch them on the shoulder, and it's easier to get them to line up straight if you put your hands on their shoulders and gently move them. Reposition feet and hands by explaining and physically moving them. He's right, and their parents don't mind because it's clear that this isn't "bad touching." And I've noticed that the kids warm up to me faster and more than when I never touched them. And they pay attention better, and learn how to move themselves better than when I used just words.