One role of the nervous system, in regards to the penis, is to help the owner "feel" sensations and then have the brain decode these sensations and respond with a "feeling" of response.
There are nerve receptors that pick up different kinds of data from the penis and respond with a "feeling" that one feels associated with these receptors.
Some of these receptors detect pain, some temperature, pleasure, and other things.
Imagine the sense of tactility you have at the end of your fingers.
These tactile nerve receptors allow a person to "touch" things and feel their terrain.
The tactile receptors are quite numerous in the pads of the fingers.
This is why they are so useful for "touching" objects and being able to feel them.
Unlike your knee or elbow which doesn't have the same amount of tactile receptors.
We take "touch" for granted, as it is an everyday occurrence encountered every time we use our fingers.
But without these receptors in our fingers, we'd have a very difficult time getting around in our environment and would have difficulty feeling, for instance, the grain of wood on a board.
The penis has two areas that have tactile receptors that respond to light touch.
Just like our fingers.
These are from a type of nerve receptor called a Meissner Corpuscle.
They are prominent in the foreskin and in the frenulum which is at the bottom of the back of the head of the penis.
It is a "Y" shaped structure that helps pull the foreskin down over the head of the penis during sexual intercourse.
These tactile receptors, literally, enable a man to feel the inner contours of the vagina during intercourse.
Imagine your penis having the sensitivity of your fingertips...
Now apply that during intercourse and that's what they're there for.
They respond to very delicate pressure and small vibrations.
Unfortunately for men who are circumcised, they have lost their foreskin which is rich in this type of sensor.
The frenulum, if it wasn't too badly damaged during circumcision, may still have some of these receptors left.
To test these, gently push your frenulum against an object, say the fibers in a piece of cloth.
Then, test another area of your penis (such as the shaft or head) and see if you feel the same degree of response/sensation.
If you have a foreskin, you can perform the same experiment and notice the difference in sensation relative to other areas of your penis regarding fine touch perception.
There are simple methods that can help men increase the sensitivity of their penis if they are circumcised.
Just like when a person loses their eyesight, their hearing abilities increase to make up for the lack of visual information.
This can be applied to penis sensitivity in a similar fashion, with some simple exercises.