What you're seeing is normal, the sensitivity of this radio is very low. Touching the antenna with your hand turns your body into an extension of the antenna, and your body resonates pretty well at FM freqs, so it becomes an amplifier.
Yes, the middle is hot, the shield is ground. As for needing to ground the radio to the antenna shield, "probably". You'll need to try. Depending on where you have the USB Radio in the car, it may need the shield to extend the ground plane of the radio. Each installation will vary...



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