Answer
Wa `alaykum as-salamu wa rahmatullahi wa barakatuh.
In the Name of Allah, Most Gracious, Most Merciful.
All praise and thanks are due to Allah, and peace and blessings be upon His Messenger.
In this fatwa:
1- Treating your nephews gently and lovingly is something that is recommended in Islam.
2- There is also nothing wrong if you kiss and touch them as they are your mahrams.
In his response to your question, the prominent Muslim scholar, Sheikh Muhammad Iqbal Nadvi, Imam of Calgary Mosque, Alberta, Canada, and Former Professor at King Saud University, Riyad, Saudi Arabia, states:
One of the most important relations that Islam gives great care and concern for is the relationship of lineage and kinship. The Prophet (peace and blessings be upon him) said: “Whoever would like his provision to be increased and his lifespan to be extended let him uphold the ties of kinship.” (Muslim)
I am surprised at your husband’s understanding. This is purely a mahram relationship. To educate him on this issue, you may quote for him verse 23 ofSurat An-Nisaa’ which reads,
“Forbidden unto you are your mothers, and your daughters, and your sisters, and your father’s sisters, and your mother’s sisters, and your brother’s daughters and your sister’s daughters, and your foster-mothers, and your foster-sisters, and your mothers-in-law, and your step-daughters who are under your protection (born) of your women unto whom ye have gone in – but if ye have not gone in unto them, then it is no sin for you (to marry their daughters) – and the wives of your sons who (spring) from your own loins. And (it is forbidden unto you) that ye should have two sisters together, except what hath already happened (of that nature) in the past. Lo! Allah is ever Forgiving, Mercifull.”
Touching a nephew is simply like touching your own child from both the cultural as well as the Islamic perspective.
Almighty Allah knows best.