Aw, nellyjane, lovely picture of him snoring into your ear!
It's so hard to disentangle cause and effect with babies, isn't it? He could be wanting to nap on you because he's got used to it at night - but maybe he's wanting to comfort suck at night and nap on you in the day because he's feeling particularly needy at the moment. Perhaps he's coming down with your cold?
What happens if you pop him off the boob when he starts to do sleepy fluttery sucking? You might be able to put him down next to you at that point? I don't know about sleeping on their sides being bad - I always thought it was OK as long as they were wedged so they couldn't end up on their tummies, but I might be wrong.
When mine were tiny I sometimes used to sleep curled around them on my side, so I didn't have an arm underneath them at all. It felt more comfortable as you avoid the dead arm thing, and they can still snuggle into your body.
Have you read the no-cry sleep solution? I did the 'Pantley Pull-Off' (a way of popping them off by breaking the latch with your finger when they start to get drowsy) with my dd1 and it meant she learnt to be put down awake rather than trying to keep a nipple in her mouth all night. Must say I haven't bothered with dd2 though.
Sometimes they do get harder to put down to sleep as they get older and more aware - it might not be anything you've done. And in any case every stage is very short. Your baby won't be trying to nap on you forever, so whatever you decide to do about it, please don't feel bad or overly worried about it!
Crikeybadger - I just wanted to add my suggestion for the duvet problem. I put my dd2 in a grobag and she goes on top of the duvet or just next to the very edge of it. Seems to work OK.
And as far as moving them on into their own cot goes - 17mo dd2 is still in with me so I don't know how she'll take it.... With dd1 I left it till she was two and a half and at that point she went very happily into her own bed in her own room. As a transition stage she had her own bed next to our bed. I don't know how it would go with a baby rather than a verbal toddler. I decided to wait till I could explain what was happening and get her to co-operate, and it worked out quite well!