To respond to the long-dangling question, the reference is to the manga Iinari! Aibure-shon. In the story context, the thread is supposedly the Red String of Fate -- connecting from the ball in the palm of the fated one's hand to the fate-ee's pudenda. Touching the ball does pretty much what you think it does.
I was always under the impression that the RSoF was always attached to one person's pinky to the other's. I suppose a mix up along the way could result in something like this, though.
Haruhi just picked the worst human/alien in the world if she was going to attempt to do something heinous/erotic with it.
"Iinari! Aibure-shon" is a manga like this.
~Haruhi vs Nagato chapter~