I think this is part of the normal range of dog behavior.
I have three dogs who each perform some type of ritual behavior to help them relax. The first is an 8yo Chi/Beagle mix who vigorously chews/suckles my arm whenever he's excited or overwhelmed. Sometimes it really hurts! But it seems important to him. If I let him, he'll continue until he can't keep his eyes open any longer--he'll even leave his open mouth around my arm after he has fallen asleep. The second is a 6yo Chihuahua who licks any available human or dog in any spot (except the face--apparently that's drawing the line at too gross for her) compulsively until she's fully relaxed. The third is a 3yo Chi who "bites" (delicately rubs her teeth against; imagine a dog biting fleas off its front legs) fabric wrinkles. She never seems stressed, but she too seems to enjoy the mouthing behavior a lot.
I don't look at these hobbies as things I should try to talk them out of. The second Chi was definitely not weaned too early. The first Chi is her mother, and they have always lived together. In fact, the "baby" still occasionally tries to suckle from her mother. Her Mom doesn't reprimand her, why should I?
Additionally, all three dogs lick each other to help them sleep. Dogs use grooming as a social tool. It makes them feel happy, in accord with each other, and relaxed. Dogs of all social standings will lick each other when they lay down together in a pile. I think that it's a bit like a massage for the receiving dog, but it also feels nice for the licker.
I asked my vet about this when I first rescued the Chi/Beagle, and she said that she hears weird stories about licking and biting all the time. It's probably just happy pacifier-time for your dog to bite your arm, but doubly important for him if he doesn't have other dogs around to lick or chew on.