I might be way off, and maybe interpreting things according to my own feelings/experiences...
But your dream really struck me. I have some erotic transference going on for my T, and if I'd had your dream, I know what it would mean to me. The pinch, and the fact that he said this is the kind of physical contact he gives could represent both the physical touch you want from your T, but also with safe therapy kind of boundaries. I think it could also represent the intimacy that a lot of us want to have with our T's (not just romantic, but relationship intimacy in general... wanting a personal, two-way relationship). The fact that you were pinched (pinches hurt) struck me because I think that the T relationship is both exciting and torturous (because it isn't everything we long for)... so it makes sense that you were glad to be touched, but that the touch hurt.
But... my favorite part of it is that he rubs it better. Still safe touch, and appropriate boundaries, but a loving, healing gesture. Understanding the pain you go through, and doing his best to soothe it.

Just like T's understand what we go through in the T relationship, and do their best to give comfort and support and genuine caring... even if they can't be everything we wish they could.
That's just my idea. Like I said, I could be projecting my own feelings into it too much. But I just thought I'd share what I got from it, in case it rang true at all for you.
You have a great T, I can tell.