If my teacher keeps treating me like this is it going to make people suspicious/get one of us in trouble?

If you really like this man then you need to back off a little. Even if your school is relaxed, you are a minor, and he is endangering his career by behaving in this way. If there is another teacher you trust who is his friend, maybe you could talk to that teacher. He needs someone to warn him about boundaries. And it's not right that his familiarity with you is endangering your friendships with your peers.