I think the school have been unessecarily PC over this issue. It would have been appropriate to confirm that your son's overt affection is not always appreciated by his classmates as a whole, rather than making an example of Muslim children. I think the point that Muslim parents would not apprciate such an open show of physical affection is a fair one, but it's not necessary to point it out in this context, it can, and obviously has, simply raised a cultural aspect to the matter that is not relevent.
I fully understand your hurt at the apparent unwilingness of the school to allow your child's natural affection to be displayed, but I think that they have to be responsible to everyone, and not every child understands, or likes affection shown in this way.
I think the teacher should accept some responsibility in guiding all childrens' relationships with each other - maybe it could be discussed as a whole class, rather than singling you out to be told in the way that you were - which leaves you feeling embrassed and awkward about taking the issue forward with the staff for the benefit of all.
Hopefully your child, and the rest of his class, will move on from this in the effortless way that children of this age do, and hopefully you and the teacher can do the same.