It really means: "Are you enjoying it?" It is not perfectly correct, but it is OK to use.

It's ok to say "Are you liking it? " For example Are you liking it in New York? You can also say: Have you seen that new movie? Do you like it?

Yes. The teenagers, an old guy saying this too much often would be unbelievable. That's bad grammar because usually you don't give "ing" to a stative verb, I mean mostly. In this case the speaker is trying to use a slang tone of voice to express his strong affection at the moment being, stronger than ever. If your hound just won the prize in a race, you went up, hugged her, you'd say, man, I'm lovin' you!

i'm lovin' it!