My cats too, have spent some of their nights sleeping in my hair (waistlength) they usually circle around and do the kneading with their claws bit, then snuggle down and doze off for hours! I have always just taken it as a sign of love and wanting to be close to their mommy (in her fur), as they were when they were little. If they are licking or chewing, it may be that they are grooming you, as they do each other, also a wonderful sign of love!
I have heard about liking the heat also, but mine usually (although,I have pictures to prove otherwise!) sleep behind my head in my hair puddle, if they are not sleeping under the covers or on different sides of my legs! I have four cats, so they pretty much box me in: head,stomach,behind knees,front of calves. I have come to accept that whatever position they catch me in, I will be that way, however uncomfortable.