can a cop touch or kiss in anyway like that ?

depends where you live. In Az, they do it, but the charges don't stick

You can research LE (see upper right of this page).  This topic comes up at least once a week.

It doesn't matter.  When LE sets up a sting their only goal is to make arrests. Convictions don't matter, that is the next guy's job.
Answering or placing an ad or doing anything else that puts you in the room with LE is going to get you a trip downtown.  

The key is to not wind up in a room with LE in the first place.

it depends where you are. Just placing an ad, isn't enough for some places. Being in the room isn't enough either, otherwise they wouldn't care enough about getting you to talk.

A few years back, I know that I had a cop in my room, just from the way he acted. I went into the "I take donations for my time" speech and he left. Very angry, which only solidified my cop theory.

It does depend on state statute but in general an undercover LEO can do most anything, say most anything.  It's what you say & do that is important.  In most jurisdictions you must say do something to indicate that it's cash for sex.  Really, there's no reason to talk about it, you both know why you're there.
Old school was the lady would not get the donation until the gent was dressing...  several of my Fav ladies use this system or do so after the first appointment.  
Other ladies are more afraid of being ripped off or run out on, so insist on donation up front.  I would say most ladies get the donation first these days.  This is a decision you must make for yourself.  
skb