I don't think it's a fine line at all. If you're not ready to sleep with someone, you're not ready, and it's not your job to get him off just because he gets turned on! He can go bust a nut all on his own

Happens all the time!
I think if you make out with him, he'll figure out that you're interested in him. If he's not a total scumbag, he'll respect you and your decision (probably more?) for not taking it further at this point in your "relationship."