Answer
1. There are two aspects to your query; a) Permissibility, b) Morality.
Islam encourages morality. Rasulullah (Sallallaahu Alayhi Wasallam) said,
‘Imaan and shame are companions. When one is lifted, the other is also
lifted.’ We are encouraged to display modesty during intimate relationships.
It is immodest for the husband and wife to look at one another’s private
parts.
2. It is permissible for the husband and wife to arouse one another by
caressing the sensitive organs of one another.
and Allah Ta’ala Knows Best
Mufti Ebrahim Desai