It feels good and it is comforting. He was probably relaxed around his littermates, and anyone who objected to being humped had already told him off. He knew his place in that world. Now he's in a new, exciting, confusing, anxiety provoking life. He's reacting to the change with socially inappropriate behavior. He doesn't know it's gross, any more than a toddler knows that picking his nose in public is disgusting. He's just a clueless baby. I think you are doing the right thing by distracting him and giving him something more socially acceptable to do.