Why does my iPhone 4 get so hot during charging?

FYI, iPhone 4 does have heat sensors and if it gets dangerously hot it will show a black screen with a yellow warning sign and shut down. It's perfectly reasonable to be concerned and take the measures you have to increase heat dissipation, but batteries warming on charging is quite normal. I wouldn't worry unless the iPhone displays an overheating warning consistently.

The charging process heats the device (phone/laptop/or any other battery), make sure that it’s relatively acceptable. If in doubt take it to an Apple Store together with your charger to compare with others. If you live in a very hot place, it might be safer to help dissipate heat by using the floor or any other metal surface.

If it gets too hot, the battery will not be happy and will “last less”.