No. Absolutely not. It is completely normal for an infant to tug on, fondle or rub his penis once he's developmentally capable of finding it with his hand.
No. Completely normal. At some point he will need to be told not to do it in public, but before that, reacting to this behavior any differently than to any other normal behavior will attach unnecessary special significance to it. Either guilt over, or conversely compulsive fascination with, this activity would be counterproductive.
No. It's a fact of life: boys of all ages play with their penises. It's completely normal. However, if the tip of the penis is red or swollen, then he needs to be seen by a doctor. But if the penis looks normal and the child seems to be pain-free, don't worry. As I say in my office, "it's just a phase: he'll only do it for the rest of his life.".