I think you are reading WAY too much into the situation.
If giving someone a tight squeeze on arrival/departure and having starry eyes is indicative of one person falling for another, then I might just lock myself indoors for fear that people will take my friendliness as me falling in love.
From my perspective, there are three possibilities here:
1) You/you and your wife like the idea of other people being attracted to one/both of you and so look for the smallest signal to satisfy your kink.
If it's a turn on for you and your partner to imagine that other peope are into you, then that's (obviously) fine, and you can continue living out this fantasy without involving other people.
In option 1, the only reason for it to become a delicate situation is if you involve other people/tell the friend.
What should you do? Share the fantasy with your wife and explore it as you desire. Make false scenarios to support your fantasy and enhance role play and turn little thing (like a peck on the cheek) into big plotlines in your roleplay that enhance the fantasy. I'd recommend using a stranger as your 'pawn' though, to reduce the risk of damaging your friendship.
2) You're seeing something which isn't there.
It could be as a result of alcohol. Perhaps your drunken mind is seeing signals which don't exist? Or your friends inebriation is leading to her acting slightly more provocatively/flirty than usual due to lowered inhibitions? But this doesn't mean she has any real intent or meaning behind her actions.
You mention body language a lot in your posts, which makes me think you must have studied it too? In which case, you'll know as well as I do how drugs and alcohol affect body language: both the person emitting the body language, and the ability of those deciphering it.
Nothing can be taken at face value when booze is involved.
(And as we ALL know booze = glazed eyes!)
Or the above could be as a result of your friend being single. If she's recently single, there's a good change she's testing / relearning her flirting skills and is choosing to do it within a safe/low risk environment. How so? Firstly, you're a friend so the risk of flirtation leading to sexual assault is much lower and you're married, therefore making you unavailable and low-risk flirting target (especially as she's friends with both of you).
If that's the case, then her freedom is having a similar impact to alcohol and is making her act more flirty. However chances are she still has no intentions behind her actions. In fact, if you were available/interested/a stranger, she would likely look for another, more safe option for flirting practice.
What should you do? Stop looking for signals which aren't there, and spend more time focussed on being present in the moment rather than analysing body language. Understanding body language can be an advantage to a point. Beyond that and it starts damaging your communication skills. Imagine if we decided to focus all of our energy on using our ears to communicate, and discounted sight. It would have a massive impact on our ability to converse easily. By spending too much time watching body language, and not enough on all of the other layers of communication, you're doing the same thing.
3) Your friend really does have a thing for you and is acting inappropriately.
You need to put a stop to it. The only behaviour which you've described which rings alarm bells with me is the "hand under shirt" move. If this is unusual and unexpected behaviour, and you're uncomfortable with someone doing that, then you need to say so. No delicacy required. This comes down to respect and consent.
If someone did that to me, they'd get a firm shove and a serious talking to, regardless of my history with them. The only reason to be polite about that sort of behaviour would be if you actually want them to carry on doing said behaviour (which from your comments it seems you don't want.)
What should you do? If this happens again, you grab your friends hand and remove it from your body, look them dead in the eye and tell them that zone is for you and your wife only. If they persist, they are not your friend. If they are your friend, they'll be mortified at the fact they've overstepped a boundary and will likely shuffle away with their tail between their legs.
In all three scenarios, I see no reason to tread delicately. 1 & 2 are harmless and require no action. If anything, it is you and your wife hwo is potentially creating the delicate situation. And in scenario 3, the only optin is to go in guns blazing (unless you want the behaviour to continue).