Re: Physical contact vs. "no-touch" policy
I used to teach kids class, mixed kids & adults class and mixed adults class in karate. I don't think one can teach a class with a "no-touch" policy unless one uses a shinai (kendo bamboo sword) as the late Enoeda sensei used to do. He would correct ones stance, posture and arms/hands by hitting the appropriate part of the body with the shinai.
During a seminar we were practicing ma-ai using chudan oi-zuki (lunge or step-up punch) our fists were required to stop within millimeters of our targets. I was paired with a senior lady instructor with fairly big blossoms. I didn't really think of her as an opposite gender and I could manage my punching very well with full speed and power. After a few punches, she looked disturbed and her eyes were staring at my fist each time I finished a punch close to her chest. With that she had upset my concentration and after that I stepped and punched with half the speed to the disgust of the shihan.
My point is that touching is inevitable in martial art but there are zones that strictly off limit as far as gender (including children) is concerned. I also want to mention here is one can tell difference between a fondle and a touch.