There is a very very significant difference between trying to help a child who shows signs of not being comfortable with human physical interaction and trying to nurture more closeness... and allowing your children to develop their own sense of personal boundaries and a voice for speaking up and maintaining them.
If you have a child who doesn't show signs of an aversion to closeness, why would you ever make that child hug or kiss relatives (or anyone) who the child didn't want to hug or kiss? And for kids who have aversions to closeness or seem to be overly averse to physical contact, yes as a parent you want to nurture that, but do you really want to do that by modeling for your child that relatives/friends who would try to guilt your child into that contact should be obeyed? It is absolutely possible to nurture and develop in a child a greater comfort with appropriate physical closeness without teaching them that they should do things simply because it would make an adult/relative "sad" or "upset" if they didn't.
I don't see any way to look at someone who tries to tell your child how badly they'll feel and how sad they'll be if they don't get a hug and consider it healthy to make your child respond to that. Not saying the relative who says that has bad intentions - it happens all the time and it's normal and common, definitely. I have plenty of relatives who act that way, and I don't think they're mean or bad-intentioned for doing it. But my response to them and dd is always the same: "DD needs to develop her own sense of boundaries and I let her choose when she wants to hug and when she doesn't. So if she says no, it's no, and please don't try to guilt her into it."
Especially for the purposes of avoiding sexual abuse, developing this sense in a child of having body boundaries and that it's not only ok but encouraged that you only do what you're comfortable with and you speak up if you're not, that is a huge reason to be very careful how much you model for your child that adults who insist on physical contact even if the child isn't comfortable with it should still be hugged/kissed/sit on their laps. I know most parents who do say "Oh go on, give Aunt Sally a hug! Sit on Cousin Anna's lap! Uncle Rob says he wants a kiss on the cheek, go kiss him!" do so in total innocence and don't think they're teaching their child something that could potentially hurt them later, but as subtle and harmless as it seems, it can be a harmful lesson.
Making dd hug Aunt Sally (and other adults) when dd isn't comfy with it can have negative consequences later when dd and other children are trying to find their voice about other uncomfortable situations. I've seen several studies where child molesters were interviewed about what they looked for in potential victims, and they say again and again that if the child seems not comfy talking about things that make them uncomfortable or they've been taught that if an adult asks a child for something the child should usually do it... those are characteristics that make it more likely the child wont tell if something bad and confusing happens to them - because they won't know how to tell or feel like they don't have a right to say no.
Please understand: I am NOT saying that relatives who use "I'll be so sad if you don't hug me" language to try to get a child to hug them are abusers or parents who make the kid hug the relative are insuring their child will be abused later. I'm just pointing out that developmentally it is actually VERY important for kids to learn that they do have the right to personal boundaries and they should have some say in when they hug and when they don't, and not be taught that adults who try to guilt them into things should be obeyed. This is a whole different issue from kids who show signs of an aversion to closeness that a parent would naturally want to investigate and work on with the child. But even that child still needs to be taught how to speak up in situations they're not comfortable in, even while being encouraged to open up a bit and find more comfort in physical closeness.