I'm assuming that the button gets hot, but the rest of the tube doesn't, or you would have mentioned that?
Most likely it's a bad connection. Resistance in the button acts just like resistance in the coil; it will heat things up.
Unscrew the button part. Clean the threads (both in the tube and the button) with something like alcohol. Look at the threads, make sure they are clean and well-made. Clean off the screw as well (where it contacts the battery). Screw the bottom onto the tube before you put the top back on; make sure it is tight.
The "missing" piece of insulator looks strange, but it shouldn't be a problem unless the mod is firing all the time.
Does the button heat up rapidly when you fire it? Or does it take several vapes before it gets hot? (Or is it hot when you first pick it up? That would be bad!).
Also, next time the button gets hot, open up the mod right away and check whether the battery is also hot. If so, get rid of the battery and get a new, good one!!!!!!! Right away!
I forgot another thing, yes, the tube warms up too.... So does the tugboat. Not as hot as the button. But yea, the whole thing is warm, I'm worried about the button getting hot though. I need to know how to fix this.