Crossing the line

A young friend of mine did something today that made me question a lot of things about friendships, and especially ones where there is a large age difference. When I first came to Brazil 7 years ago I volunteered at a small children's charity, and met this young man who was 17 at the time. He had been attending the charity previously, but was now hanging around as he fancied one of the female volunteers from the UK!
He used to come to the charity often, and later developed a more serious relationship with another young English volunteer, which continued after she finished her internship, and she in fact returned the following year for a holiday with him. When she left I think he realised that the relationship was over and it affected him considerably, and he visited me a few times to talk about it and what he wanted from life. He was still at High School at the time, and eventually graduated, which isn't that common amongst young people where I live, though he found it very hard to get regular work in this area, with tourism being the main employer.
I do not make friends easily, I have many acquaintances but very few what I would call "close" friends, but he and I developed a friendship - not a really close one as I felt (still feel) unable to get that close anyone that much younger than me, with different values and different cultural background, but I would consider him a friend. He used to pop in periodically for a chat, or to use my internet, have a coffee, and so on, and on occasions I would pay him to do some odd jobs around the house (like breaking up old floor tiles so I could lay new ones).
He was living at home with his parents and three siblings in a very small house, and had no privacy but couldn't afford to move out and find a place of his own due to irregular low-paid work. When I had to leave Brazil for 6 months due to not having permanent residence I saw a solution to both our problems - I needed someone to look after my house and he needed somewhere to stay, so I asked him if he would like to stay rent-free while I was away, and I would also leave enough money for the utility bills for the duration - effectively all he had to do was provide himself with food (though I understand he went "home" most days for that!!).
This worked well the first two years I had to leave, though, perhaps foolishly, I also gave him some money by way of thanks when I returned. I say "foolishly" as he then started asking how much I would pay him to look after my house, until I pointed out that the rent money he was saving, and not having to pay utilities was worth a lot to him, especially as the alternative was living back at home as he still did not have regular work. I thought that the arrangement had been mutually beneficial, and especially as I considered him a friend, so was surprised that he simply saw it as a financial arrangement.
The third year he said he was only prepared to live in one or two days a week, which I was not happy with, particularly since my house is out of the way, and I just felt that he would not come and check regularly, but he refused to consider living in, so I arranged for a neighbour to keep an eye on my place - but that came at a price!
This year he approached me and asked if he could stay in my house again while I was away - he was out of work, living at home in very cramped accommodation with no privacy, and was very stressed out. I agreed but explained that although I would again leave money for the utility bills I didn't think I could afford to pay him anything much for staying, as again I explained how much he was "saving" by having the run of my house. So he moved in as I left for Peru.
While I was away he messaged me asking how much I was paying him, and again I explained that much would depend on what state the house was in on my return (one year he lost the keys so I had to change all the locks, including 3 padlocks!), but that it wouldn't be a lot, again pointing out the financial and mental benefits of him living in my house. A few weeks later he messaged again asking if I could pay him R$2000 as he needed that to buy a motorbike, or if I could loan him that - and again I responded that there was no way I could afford that, either as payment for staying, or a loan (that I knew he couldn't afford to repay!). I did, however, pay him something upon my return, though by then was questioning our "friendship" as it was beginning to look as though he was only interested in what he could get out of me. 
What was I getting out of the relationship? It is hard to tell, though I felt he was a young man with potential, and needed a father figure to offer him guidance, something his own father (who kept walking out on the family and then returning) was not giving him, and he often used to say that he valued my advice and friendship. I was concerned that he used cannabis frequently, and admitted that he had taken harder substances, and on occasions he appeared so spaced out I was worried about him, though he insisted he was simply in a bad place mentally due to lack of work.
So, to the crossing of the line today. He arrived at my door in an obviously very disturbed state - he was holding himself very stiff, staring straight ahead, and barely speaking. We had a coffee and he relaxed a little, and told me he had to find somewhere to stay as he was feeling claustrophobic at home as he had no privacy, but also had no money to rent anywhere (he had asked me before if he could rent a room from me but I told him at the time that the almost 40 year age difference would be a big problem as I wanted peace and quiet and he liked to play music loud all the time!). He asked for another coffee and we chatted some more.
He kept fiddling with himself "down there", something which is actually commonplace here so didn't worry me unduly, but then placed his hand inside his shorts and took his erect penis out!! I immediately remonstrated with him, explaining that this was something you didn't do in company, and he put it away but he replied that this wasn't "company" but friends, and he needed to do something to relax. I pointed out that this was not the place for that, and asked if he would do it in front of his parents, brothers and sisters, or male friends, and when he said "no way!" asked then why he felt it OK to do it in front of me, as this was extremely disrespectful. 
He said he couldn't do it at home, even in the bathroom as they would know what he was doing, but I told him that no matter what it was rude, insulting and disrespectful to think it was OK in my presence. He then said he thought I might want to watch! I explained that just because he didn't see me chasing women that didn't mean I was interested in men, and he said he didn't mean that, but maybe I liked both. I again pointed out that even if I did like men, it would be shocking if a male friend I was not in a physical relationship with started doing that in front of me - but he said he would do that with a female friend as well! He asked how I would react if a woman started playing with herself in front of me, and I said that unless we were in a relationship I would be equally shocked and offended.
He apologised, though I told him I was not sure I could accept the apology as he had crossed a line, and what had happened could not be undone by simple words, especially as by his conversation afterwards it did not appear as though he felt he had done anything wrong.
He stayed a while longer before asking to borrow some money for cigarettes and then left. Leaving me wondering what had happened and what it meant to our "friendship". Did he think I was friends because I "desired" him in some way? Did others view a friendship between a 63 year old man and a 24 year old in that way? Was any friendship between men with such an age difference possible without appearing "odd"? Was I incredibly naive in believing that I could have an innocent friendship with a much younger man, especially in a country where they consider every Gringo to be rich? I mean, I know that despite him claiming that I am probably his "only friend" here I now that his understanding of "friend" is probably a lot different to mine - I am his go-to guy, when he needs a lift, or to borrow some money, or simply a quiet place to go to talk to someone. We are from completely different backgrounds, educationally, socially and culturally so don't have a lot in common, and I know that I will never view him in quite the same way in the future - I did in fact warn him that if he ever pulled a stunt like that again he would never come to my house again. I am too trusting, and always try and see the good in people, and that faith in my fellow man has been sorely tested yet again!