The worst thing for you are your thoughts about harming yourself and doing something that is bad. I don't know what k of erotica you are reading, but whatever it is, in an age of instant visual stimulation aka porn to see someone who actually engages their imagination via reading is refreshing.

The quality of sleep is a functionally determined parameter, in other words, if you wake up invigorated and can go through the day without excessive caffeine, you are ok.

In your particular case, I would continue doing what you have been doing but release all the thoughts abour harm and being bad. Then come back say in two months and we will see how you will be doing and possibly recommend more changes. Without releasing your negative thoughts it is utterly impossible to tell if you need to change habits, because, for instance, it might very well be that your frequent awakenings are a result of constant anxiety driven by negative thoughts.

Re touch. There are workshops called Cuddles Parties where people can experience non-sexual touch that is consensual. They have a facilitator and rules. I have never been to such a party, nor plan to go, but given your particular concern, it might be just what the doctor ordered for you - safe and structured. Better than forcing yourself into a relationship. True, iy won't be sexual touch, but you are probably deprived of ALL touch atm.

If you are that deprived of touch, volunteer to socialize rescued kittens. It would be very helpful contribution because socializing kittens vastly improves the kittens' chances to be adopted.

Seriously - I know this is not what you had in mind when you posted, but humans are social mammals and thrive on touch...