Weird kneading and lipstick out

Uhm let's start by saying that my kitten eats and does his business very well but sometimes he will start kneading his fav blanket (with both his front and back paws) and sucking it and will bite it and try to drag it somewhere. He usually sleeps in his room but today I felts extra depressed and kept him in my room. But at some point he started biting lightly my hand trying to pick up some skin and drag it somewhere and I noticed that his penis was out (I noticed that it would be out when he is grooming himself too). He is almost 5 months and not neutered (I don't know why but majority of vets near me don't neuter before 7 months). Is it normal? Do you have experience with something like this? It felt like he was "humping" my arm. Also he religiously pees in his litter box for now. He is the only cat of our house and no female nearby.