Typical Yorkie technique. They want attention but are not so much fond of the idea of being held and hugged, snuggled, tightly restrained during hugging, all that much, so they feign away, wanting attention but knowing they likely could be picked up and restrained longer and sometimes more tightly or even more insecurely held than they are comfortable with. Many dogs like hugging sessions to be short and sweet if we just must hug.
Some dogs feel like our putting our arms across their backs is a gesture of domination or know we might be head-patters - something many dogs utterly detest. Yorkies tend to be very careful of their body around others and so often back off from approaching hands. This changes as he learns he can trust you not to do things he doesn't like.
If your dog comes up and presses himself into you, leans into you or when you're reclining, crawls and stretches its whole body out across your upper torso or neck, your dog is a hug-lover. If not, you have one of those who prefers other expressions of affection, such as tummy, chest, base of tail or back-scratching/caressing. I've had one of the first, two who preferred the latter.
He's whining and baiting you as he's probably bored and wants attention and nurturing but not necessarily all that that attention might lead to. I suggest you walk or play with him, finding out what kind of play he likes and what he doesn't. Use squeaky toys, balls or tugowars, things that will activate his sense of play pleasure and allow him to get the attention he craves while freely interacting positively with you. After the walk or play session, scratch and caress his tummy, back, base of his tail, finish with a quick, intimate little tickle on the upper inside bare skin of the upper thigh. Never known a dog that didn't love all of those.
Eventually you two will work out what is acceptable, pleasurable and what's not to him and your little one will begin to trust you won't treat him/her in any way he doesn't like so much.
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