reading pwm signal doesn't work correctly
check if the problem is the fact you have set 9700 baud rate on your sketch while the commonly used 9600 is supported from arduino IDE.



I slightly modified your code and it works for me. Check if this works for you:

#define Pin 3
#define Source 5
unsigned long  pwm_value;

void setup() {
    pinMode(Source,OUTPUT);
    pinMode(Pin, INPUT);
    Serial.begin(9600);
    analogWrite(Source,500);
}

void loop() {
    pwm_value = pulseIn(Pin, HIGH);
    Serial.println(pwm_value);

}


when you connect pin3 with pin 5 you should get a consistent value on Serial(=967).

About getting signal on floating pins

Getting a signal on a floating pin is normal.
When you have a cable attached it acts like an antenna. When you touch it, you are the antenna!