Hi M. -
Excessive chewing and mouthing at this age is an indicator that the child is feeling stress and anxiety: it may be difficult to pinpoint exactly what is making him anxious at this point (though feel free to just out and ask him: many children are VERY insightful when asked to answer questions about their own mental health), but this type of behavior is NOT uncommon in normal, typically healthy children. I've seen many a mother struggle with their child's excessive shirt collar and sleeve chewing (to the point where their children are chewing holes through their clothing) but the more you bring attention to his chewing habits, the more you try to re-direct him, the more attention you are bringing to the situation, hence creating even more stress and anxiety which exacerbates the problem rather than helping it. The more attention you pay to it, the worse it will get.
Some children just have anxious personalities: does he attend preschool or daycare of any type? He is at a great age to introduce him to a preschool setting: and while it may be a very difficult adjustment for him at first, it will allow him to build relationships with both teachers and peers which builds self confidence, thereby reducing anxiety and promoting more healthy ways of stress reduction. There is nothing wrong with healthy caution of strange situations when it comes to children his age, but from what you describe, he seems to have very little assuredness in himself, his own social skills, and capabilities. This is no fault of your own, but if he is to resolve some of his anxiety issues, preschool would do him a great service from a purely social standpoint. Preschool should not be for teaching academics (and if you come across any preschool that toutes their academic schedule, they have the wrong idea about what preschool is for, and you should keep your child out of there!) but for creating self confidence, a sense of independence and pride in ones self and capabilities, and promoting social comfort.
That being said, there IS something you can do about the chewing: with many children, both typically and non typically developing, the chewing habit can be controlled by giving the child something appropriate to chew on when they are feeling anxious. Visit this website and check out the kids "chewing" toys: we will often attach them to a long cord that hangs around the child's neck so that it is there for them to chew on when tey are feeling anxious.
http://stores.ebay.com/Autism-Superstore_Oral-Motor_W0QQc...
(any of these toys are good: he is typically developing in other ways, Im assuming, so you dont need to go as far as getting vibrating chew toys unless you think he might like them more - the point is just to find a non latex, non toxic soft and pliable "not breakable" thing for him to chew on)
Don't let the "autism" thing scare you: many children with autism experience some very serious oral motor issues that we use these chew on toys for, but that in no way means your child has autism! The chewing to deal with stress is a very common thing in children, and this is just one way to easily deal with it.
He will grow out of the habit as he gets older and becomes more confident in uncomfortable situations. Let it be for now: if it continues well into the future, he may need to be treated for an anxiety disorder, but at this point his habit would be considered normal and common.