What about kissing or hugging children?

Kissing and hugging are the same. Fathers and grandfathers can (and should!) kiss their young or even teenage or adult daughters and granddaughters, as can mothers and grandmothers to their teenage or adult sons and grandsons, as signs of familial love. You can kiss your sisters until they are 12, and nieces until the age of 11 (Resp. Be'er Moshe IV, 145). Regarding other girls, just until the age of 3, and women may kiss non-related boys until the boys are 9. This is obviously not insulting nor personal, but rather stresses the importance of modesty and holiness of anything that may, even slightly, have sexual connotations, that are totally dedicated to the sanctity of marriage. Regarding men kissing boys or women kissing girls, it's totally fine at all ages, and we don't think or worry that someone may have homosexual/lesbian tendencies, but surely not on the lips, and if one does feel such tendencies, then it is forbidden.