My 3 year old boy plays with his penis alot. is this normal?

Totally normal. Think of it this way - newborns find their fingers and toes and spend a while playing with them, right? Toddlers find their penis, especially around the time they're potty-training because it's suddenly more accessible and they play with it. As we all know, it feels good. They don't know there is ANYTHING wrong (or sexual) about it. This is the time you start addressing privacy and private parts is all. With my son, we ask, "Do you need to go potty?" and if he says no, we say, "Then you need to leave your penis alone," and he stops (until he forgets and does it again, LOL).