Re: Physical contact vs. "no-touch" policy
If I have to get across "You may NOT kick uke when he is down," the child in question will likely have a "problem" with my behavior unless I am a milquetoast and don't enforce the safety rules. So that's not a completely reliable guide.
Small children are rather different from adults. It is not guaranteed they will be able to articulate "I don't like being touched there" in a way that distinguishes it from "How dare you tell me no!"--either when the touch is appropriate by adult standards or when it is not. So I think we have to bring our own judgement to the issue and not rely entirely on theirs.