Yeah, I have the same issue... at times it becomes a non-issue, and I guess at other times when she is experiencing personal change or discomfort it becomes more of an issue... she doesn't quite panic anymore, but she does get exasperated... what we do, I explain to her that it is a sensitive area and it makes me feel funny when she 'plays' with me like that... I tell her it doesn't feel good, sometimes when she is extra upset, I just tell her she has to use a flat hand and not move her hands and let her rest her hand there, she has fallen asleep that way.
She was weaned about 5 months ago, due to me being too weak in early pregnancy to nurse her any longer, her dad took her to visit his family and they stayed away about 2-3 days, it was the first time she'd slept without me, and it had been a stressful nursing experience for about 1-2 mos. prior to that, I feel like it was pretty traumatic and I feel bad about it still, I wish there was another way. After I felt better and stronger I tried to get her to nurse again, but it was too stressful of a situation for her, she was accustomed to me getting stressed about it and didn't want to try. She very seldomly asks to nurse, but she goes through phases where she asks to touch every so often, it seems like a 'growth spurt' defense mechanism kind of thing... and during those times other things will start happening with her, like she'll go from using the potty on her own all the time, to wetting herself because she wants one of us to come help her, and we're busy and she talks softly and we can't determine what she wants in time.
Our bedtime routine is very active... we sing a few songs, we give rubs and scratches to each other, we play finger games, hold hands, do hand gestures with the songs... whatever works... it took some time to get into the routine, but whenever it's tough, I add something new to it and she really likes to get into those things. I think something that is stimulating, relaxing and physically engaging at the same time should be able to replace it. I've been intending to make beaded bracelets that we can use to count numbers, do colors, shapes, etc.
btw my daughter will be 3 in a couple months.