AAAAHHHHHHHH!!!! Family, these are the people in your life that should be supportive and helpful, not make your life more stressfull. No matter the level of inappropriateness, it must stop. Whether, "the family member" stops at pinching your son's nose, or there is other inappropriate behavior, you absolutely must confront and stop "the family member" from continuing to upset your son. I don't want to sound over the top, and without more information I could be way out of line and I apologize, but behavior that seems somewhat harmless can lead to inapporpriate touching. Often pinching and tickling and wrestling are ways for a preditor to "test" a child to see what he may be able to get away with. I think you and your husband both should do 2 things:
1. Pat your son on the back and let him know that he did the right thing by telling. Give him the power to say NO to adults. Often we push "respect your elders" with our children and they don't know when and if they can say No to an adult, even when that adult is doing something that makes the child uneasy or uncomformtable.
2. Both you and your husband should approach the family member, and just lay it out. Don't mince words and don't be apologetic or back down. Be direct, tell this family member that your son is incredibly uncomfortable with his/her teasing. He does not like to be pinched. From now on, we would appreciate that you not touch my son, it is really upsetting him. Your family member maybe ofended, along with other people in your family. Don't feel bad, you and your husband are your child's only shield against the world. You can tell your family that your son's tears and fear occurred at every family function when this family member approached him and you simply could not tolerate it any more.
Best of Luck
You definately have all our support.
E.