The first step is to sit down and figure out what forms of affection you are the least uncomfortable with, and which ones are way outside of your comfort zone. Write them all down, then start with the lighter stuff. Eye contact, the brush of a finger across your arm, sitting close to each other. Then graduate to other forms of affection little by little, and remind yourself when doing so, that absolutely no human being can stay in a state of Anxiety or Fear forever. This is true for all humans and there are no exceptions. I work with some people through my coaching, who have severe anxiety and/or ocd, and the one thing that we usually fail to remember, is that our minds are not made to sit in one emotional state for to long. Allow yourself to be hugged, then hug someone else, but hold the hug. Hold it through all of your anxiety and discomfort, because eventually those feelings will fade. When they fade away, you'll know how you really feel about physical contact and similar forms of affection, and I'd imagine you'll probably enjoy them.
As for telling your man that you are in love with him, I would wait for the actual words. Either wait until you've been together for a year, or until he says it first. When you've only been together or known each other a short while, it's easy to mistake elation for love. That being said, not saying the words, doesn't mean you can show him you care. For men, the best expressions of love are through actions. Cook him his favorite dinner once in a while, buy him some shirts or make him some "love coupons" for together activities that you're comfortable with.
If you'd like any additional advice, or just someone to chat with occasionally, I'm usually available http://coaching.bitwine.com/advisors/51156-thestra... =)