Can I pitch a tent in your yard. It sounds pretty cool.
Your empathic response inspired further thought on the subject of Tulpas.
And here I also mentally revisited Anil Seth's lecture about "controlled hallucination".
In his presentation, he offered a little humor that if many people share your mental best guess, we call that reality. He identified our mental best guesses as controlled hallucinations.
Roger Antonsen identified shared perspectives as having mutual Empathy.
If we think this through, then shared hallucinations by many minds do indeed create an empathic experience of "real", but non-physical existence of Demons and Angels.
Extending my train of thought, we have generally identified social behaviors in accordance to the 7 deadly sins and 7 existential virtues.
Anyone who believes in the existence of Satan and practices one or all of the seven sins has mentally become a demon. Hence the words attributed to Satan, "I am legion". And it's true, there are a lot of bad people in this world.
OTOH, anyone who believes in the existence of Angels and practices one or all of the seven virtues, mentally becomes an angel. Hence the expression "thank you, you're an Angel". And that is also true, because there are also many good people in this world.
And it would explain beliefs in mystical mental representations (controlled hallucinations) of human behavior. We all have our mental angels and demons, our personal Tulpas.
I am an atheist and I do not believe in mystical beings, but I can understand that many people do believe in the concepts of demons and angels, and by that fact have created our own Tulpas in the images of what we fear, such as death, the dark, and mental suffering, and what we treasure, such as life, the light, and mental celebration.
Most of us fall somewhere in between and this why we have instituted secular laws, which basically address the 7 sins. Which leads us back to the OP, which is trying to define what behavior is acceptable and what is not.
And a last thought about "non sexual but affectionate hugging". We teach that parents should often affectionally hug babies and young children. But from my experience in the medical world it is also clear that elderly persons (often widows), also crave to be affectionally hugged.
And in times of great stress, strangers may offer comfort to a victim with an empathic hug.