Thanks all. Glad I'm not the only one, IYSWIM.
She's very good at helping, putting her dummy back in if it falls out, fetching nappies etc. And as I said, she loves holding her, kissing and cuddling her, even if she does snog her to death/squash her.
But, on the flip side, her volume control is completely faulty, she can't say anything without it being at full, ear splitting volume, and if it's near to DD2 and wakes her or makes her jump then all the better. She kicks and hits and doesn't care who is in the way and she's got an inbuilt radar which tells her when DD2 is asleep, so she can come and wake her up.
Part of the problem is that DD2 won't be put down, so I can't put her in another room away from harm. I do have a wrap sling which I have used but I left it in the car which is parked a street away and we're not dressed today 
I try so hard to play with her, have cuddles, talk to her, tell and read stories etc. I take her up to bed each night while DH has DD2 so it's our special time. Despite my best efforts I seem to spend my time saying don't do this and stop doing that, and I know that's not helping. When she's been difficult before I used to say "you can either carry on having a tantrum or you can come and have a cuddle" and 99% of the time she came for the cuddle and the tantrum was over. But cuddling now means squashing dd2 :( Argh, it's so hard!