Touch is good for physical health. It is a primary reinforcer and is inherently pleasurable. When you get touched on the forearm, it sends a signal to your orbital frontal cortex, which is involved in reward (click here to learn more). This is very similar to when we taste pleasurable foods, like chocolate for instance. The tactile system is also the largest system in the body and first to develop in a fetus (check out Haptic Communication). I probably should throw a disclaimer in here. Context is key. If a girl I liked touches me on the arm , then my heart is through the roof. However, I don’t like when mr. strange comes up behind me and starts rubbing my shoulders. Different cultures also have their own set of norms. For instance, in Thai culture, it can be considered offense to touch someone’s head.
This phenomenon is not unique to our species alone. France Dual & Jane Goodal discovered that chimps groom each other when there is no bugs in their environment. And why do chimps systematically share food with those who've recently groomed them? Because touch brings about reciprocity. Darleen Francis of UC Berkley also found that rat mothers who spend more tactile content with their babies had cubs with stronger immune responses and calmer responses to environmental stresses. (check out pg 170 in book emotions, stress, and health).
Not only has tactical content shown to reduce/remove external stresses, but babies also have been shown to live longer if they receive daily tactile content (cited in this article on orphanages). The research shows it and your body knows it- we want to be touched!
To learn more, check out the lecture "The Communications of Emotion" By UC Berkly professor Dacher Keltner- which you can download if you click here.