I think everything sounds normal. Babies have been recorded in utero feeling their genitals. As a person who has taken lots of early childhood psy. classes it is absolutely normal for a child to explore there body. Once a child finds out something produces a favorable sensation then why stop. It's not wrong until someone tells you it is wrong. My kids play in the buff all the time. My littlest one is now 5. She plays w/ her boy cousins of the same age and younger in the pool or bath with nothing on. My sister and I feel the same way about nudity. My little girl had no idea that it might be wrong until my mom came by and saw 2 naked boys and a naked girl running around in the yard. Sexuality is now wrong.

I think at some point we all played Dr. or spin the bottle with others that led to later questions about what is appropiate and what is not. If we all didn't then you and I must be the only ones who did. It is all part of exploration and the beginings of right and wrong and boundries.