Yea, this seems like a pretty common quandary. The topic seems to have come up even here several times.
My thoughts are that every situation is unique. So you have to look at how PC dependent everyone's lifestyle really is. It's unfortunate that we can't live in a world where living with 100% honesty & forthrightness is the rule rather than the exception. But few can. Society - and everyone's dependence on it - vary. And like you say - it's a private affair anyway and nobody else's business.
From what we've seen it's pretty common to come up with some 'canned' response to offer those inquisitive people who would be brazen enough to approach you with the "who was THAT" question. There's plenty of options to choose from to acceptably explain a hug, a quick kiss etc to someone other than your known SO. Same goes for when you are out & about as a group. A REALLY close family friend etc
So, as I say, depending on the setting, whether it's a childrens event, a professional/social setting, a general public event where family or professional contacts may attend etc, the behavior varies.
But one thing that helps to quell a lot of nasty rumor mongering is to appear in public together as much as possible. The more people realize that everyone is 'together' - on the same page - about your group (3-4- whatever) the less it will seem unsavory.
So, depending on the setting - the whole 'public affection' thing may need more or less restraint. But if you think about it - except from a philosophical standpoint - how important really IS that ? IS a deep tongue kiss really that important in the parking lot of the restaurant as compared to a nice hug?
You'll find the balance