How do I communicate with my 14 year old daughter about appropriate physical contact with her boyfriend?

My daughter and her boyfriend spend a lot of time at our house which is great. They hang out downstairs. More than once I've walked in on them "wrestling" which I tolerated until last night. When I walked in she had him pinned down, straddling his chest, with her knees on his arms. She had on a little jean skirt which I think is really inappropriate. Would you let this go or say something to her? Am I over reacting?