I agree 100%, if a dog shows sensitivity to being touched, do it more. But do it in a way that is not hard or dominating. If the dog is sensitive to having its feet touched, I would gently stroke the dogs feet and softly play with them when they are laying next to or on me... or if they are larger and don't like to be on you(or too large to be on you..lol), when they are laying on the floor. If the dog pulls the foot away, allow them to do so, then when they put the foot back down, go back to gently stroking again. If the dog begins to lick your hand, move your hand away quickly (you can even make a soft negative sound as you do it) then go back to stroking/handling the foot. Do this for very short sessions a few times a day and before you know it, your dog will find they are not afraid of it anymore. I always stroke my puppies feet when they are young for this reason, to get them used to having all parts of their body touched without fear of it being touched.
Grace was nervous about being held close in a hug when I first got her. I got her when she was 5 months old. And she also didn't like me to look her in the eye, she wouldn't keep eye contact with me. She would love to put her feet in my lap and get scrubbed and talked to and kissed but if I held her head lightly between my hands and looked her in the eye, she would try to turn her head away from eye contact. Now, to a dog, this is a dominance issue and I understood that. So, to make her comfortable with it, I would scrub her for a bit while talking to her then I would cup her face in my hands and look her in the eyes for just a split second then give her a quick kiss on the nose (which she loved) and make a big deal about how good she was. It only took a few days of doing this and lengthening the time I held her face for her to know that I was not trying to push dominance on her and she did not have to "give" to my eye contact. Now she LOVES to have me hold her face and look her in the eyes and she will look right back then quickly reach forward and give me a lick on my face.
I also made a game out of hugging, seeing as she loved to be near me and to put her feet in my lap when I was sitting in my chair so she could be rubbed and fussed over, I would give her a quick bear hug and a big kiss and immediately let her go and make a big deal of her. Now she adores being hugged, in fact, she will initiate the hugging by putting her feet in my lap and snuggling her head and chest as tight as she can against my chest. Of course, she never gets into my lap unless I invite her, she knows she has to be invited before she can put her feet up on anyone, and she will stand next to me and give me "the" look to let me know if she wants to. Sometimes I tap my legs and let her, sometimes I give her a scrub on the head and tell her to go. This way she never anticipates my allowing her to be up on me and thus waits for the cue to do so.