i'm pretty sure it's a relationship thing. i think that gay Orthodox Jews who wish to be observant of this particular law in a meaningful way would refrain from touching someone of the same sex (but since the Orthodox world is largely a homophobic one, they would also, by general custom, also have to refrain from touching people of the opposite sex; thereby effectively preventing them from human contact with anyone outside their immediate family, and i think that a lot of ppl struggle because of this). it's something that doesn't have an easy answer.

also, yes, you shouldn't sing around a male Orthodox Jew (and this is also a basis for the law saying that women can't have a vocal role in the synagogue)