Hi picklewheeze - maybe awkward is better than the way it is. Try out some phrases to see which one might work for you, maybe? Things like:

I don't like this!

This is uncomfortable for me.

I don't want to do this.

Don't squeeze me.

etc. infinite variations possible

Reminds me of my icky "uncle" friend of dad's ... ew... no way I would let him hug me. Those hands. God, no.... he always came over to drink with my dad. And then the creepy smile and grabby hugs. No way I would sit on his lap. Ick. I realize this is your grandpa, so it sounds more difficult to say no! I was defiant in that situation.

>I dont know whether I'm just completely over reacting here due to my own over sensitivity to these issues.

I don't think so.