Well, I totally understand where you are coming from. We are very open to our bodies in our house and my kids reflect that
. They love to be naked, and love to touch. My dd is only 2, so we dont address it but I do have her wash her hands when I think shes done. My ds is 4 and just does general tuggin on his foreskin and I dont say much unless he wont stop doing it, and then I remind him he needs to now wash his hands bc that is where pee comes out and we dont want to touch everything with pee pee hands.
I have mentioned also to ds when it is excessive that that is something he may want to do in the privacy of his room or bathroom, just to introduce the idea that not everyone wants to see him touching his penis. I too, dont want to create a "wrong/dirty" connotation with it. I also seem to find it harder to ignore with dd bc her touching is so much more...involved than his.. i have to contantly tell my self its ok, and I think it may stem from how I grew up. My mom NEVER talked about our bodies and private parts, etc etc... I dont think I knew i had a vulva, clitoris, labia etc until i was an adult (catholic school... no real sex ed).
I think you are doing great!!