To me, this setup would very possibly make sense. I'm so at odds with my sexuality that I can't really see myself ever getting comfortable with it, unless through something like this, where sexual feelings might be stirred up but there's no expectation to act upon them. However, I'd have to feel very safe with the person in the first place, so it'd have to be someone who's also good with talk therapy.

As far as touch in therapy, I had movement- and dance therapy briefly as part of an outpatient program, which was a good opportunity to experiment with touch, and useful for that reason, but not in an intimate or comforting way, and found it hard to connect to other parts of my therapy. That might have been because it was too brief, though.