Stevie's a bit of a diva here, but he's also relatively young and probably excited as hell! That head shaking vibrato isn't a great habit though -- he stopped doing that later on in his career, but he never stopped letting the music move him. He's a musician beyond compare, with a golden voice and YouTube videos that are sensational to browse.
Update: I notice that Diana Ross was born in 1944, and Stevie Wonder in 1950. When this was recorded, that 6 year difference qualified for an "older woman" joke. If this video dated somewhere around 1970, that would make Diana about 26, and Stevie 20. These are two young folks making jokes about their age, but as a twentysomething in 2008, they both seem exactly the same age -- baby boomers. At this time, however, it was a completely different story.
Was there a tension? Clearly, Diana probably felt that Stevie was way too young for her, and made the obligate joke. Stevie? I imagine he was elated to be sharing the stage with what might be the equivalent of his friend's famous older sister... and they were acting out a romantic tension! At around 1:40, look at Diana's body language leading into Stevie's tongue clicks (!!!). Something else, at the very least.
Finally, watch her strut over to him at the beginning! Quite a swagger.