Katie has always done this too, she nibbles on my arm when i pet her, or if i am giving her a hug she nibbles on my ear or on my bra where the underwires come together (that one makes me a little nervous!) I thought it was a biting thing and will say "Are you biting me?" she stops then and gets a toy. I have tried to discourage this behavior because i thought it was biting, now it looks like it is just lovin' (still wont let her, it scares the kids when she does it to them)
:D