Yeah, once noticed, it's hard not to notice that. They used a stand-in model, so some physical contact should have been possible, but I get that they had to be careful with the CG-animators not to screw up their work.
It should be the FX artists' job not to screw up the live action, not the other way around. If the FX work gets in the way of the performances, they're doing it wrong. The tail wagging the dog, so to speak.
This is where a physical puppet would come in handy, like the one they're using for Old Lace in Runaways. The biggest mistake people today make with CGI is using it as an exclusive technique instead of just one tool in the kit. There are some shots that CGI is better for, and others that animatronics is better for. Jurassic Park used animatronics for shots where the dinosaurs were seen in close-up or interacting physically with actors or objects and saved the CGI for things like full-length action shots.