Per Pathfinder Core Rule Book:
Square Occupied by Creature Three Sizes Larger or Smaller (page 193):
Any creature can move through a square occupied by a creature three size categories larger than itself. A big creature can move through a square occupied by a creature three size categories smaller than it is. Creatures moving through squares occupied by other creatures provoke attacks of opportunity.
Accidentally Ending Movement in an Illegal Square (page 194):
Sometimes a character ends its movement while moving through a space where it is not allowed to stop.When that happens, put your miniature in the last legal position you occupied, or the closest legal position, if there's a legal position that's closer.
Big and Little Creatures in Combat - Tiny, Diminutive, Fine (pages 194-195):
Very small creatures take up less than 1 square of space. This means that more than one such creature can fit into a single square. A Tiny creature typically occupies a space only 2 1/2 feet across, so four can fit into a single square. 25 Diminutive creature or 100 Fine creatures can fit in a single square. Creatures that take up less than 1 square typically have a natural reach of 0 feet, meaning they can't reach into adjacent squares. They must enter an opponent's square to attack in melee. This provokes an attack of opportunity from the opponent.You can attack into your own square if you need to, so you can attack such creatures normally.Since they have no natural reach, they do not threaten squares around them.You can move past them without provoking attacks of opportunity. They also can't flank an enemy. Note the differences from the swarm rules in the bestiary, where swarms of creatures can occupy a square of another creature. This rule only allows Tiny or smaller to share squares.
Cover (page 195): To determine whether your target has cover from your ranged attack, choose a corner of your square. If any line from this corner to any corner of the target's square passes through a square or border that blocks the line of effect or provides cover, or through a square occupied by a creature, the target has cover (+4 to AC).
When making a melee attackagainst an adjacent target, your target has cover if any line from any corner of your square to the target's square goes through a wall (including a low wall). When making a melee attack against a target that isn't adjacent to you (such as with a reach weapon), use the rules for determining cover from ranged attacks.
Cover and Attacks of Opportunity (page 195): You can't execute an attack of opportunity against an opponent with cover relative to you. This does not actually apply in this case, but the following will explain why.
Soft Cover (page 196): Creatures, even your enemies, can provide you with cover against ranged attacks, giving you a +4 bonus to AC. However, such soft cover provides no bonus on Reflex saves, nor does soft cover allow you to make a Stealth check.
Partial Cover (page 196): If a creature has cover, but more than half the creature is visible, it's cover bonus is reduced to +2 to AC and a +1 bonus on Reflex saving throws. This partial cover is subject to the DM's discretion.
Total Cover (page 196): If you don't have line of effect to your target (that is, you cannot draw a line from your square to your target's square without crossing a solid barrier), he is considered to have total cover from you. You can't make an attack against a target that has total cover.
Improved Cover (page 196): In some cases, such as attacking a target hiding behind an arrowslit, cover may provide a greater bonus to AC and Reflex saves. In such situations, the normal cover bonuses to AC and Reflex saves can be doubled (to +8 and +4 respectively). A creature with this improved cover effectively gains improved evasion against any attack to which the Reflex save bonus applies. Furthermore, improved cover provides a +10 bonus on Stealth checks.
Analysis While the rules provide for moving through friendly (and even enemy squares) at the Tiny size, with the exception of the Swarm rules, they do not appear to provide for ending a turn in a square with larger creatures (only smaller one's per the "Little Creatures in Combat" rules). As you are referencing a single Tiny cat, swarm rules do not apply.
While you can move through said ally squares with the Tiny creature (though not ending your movement on their square), they DO provoke attacks of opportunity per the "Square Occupied by Creature Three Sizes Larger or Smaller" rule.
While the amount of "cover" provided in any given instance is designated by the DM, if the cat is sitting on people's heads and jumping from person to person, it is obvious that it is Partial cover or less (versus the total cover which would not allow for it being attacked) as AT LEAST 50% is visible. If it is physically on a head and 100% out in the open, it may be denied any cover whatsoever, versus hiding behind characters or in their legs. For the creature to be afforded the "total cover" you are asking for it would have to be completely hidden from the enemy by a wall, or some other such solid barrier. People as cover only provide "soft cover".
However, as an alternative that would actually allow the familiar to travel in just the witch's square with total concealment, they could purchase a "familiar satchel" as the familiar is Tiny. However, movement in an out would still provoke attacks of opportunity.
Witch's familiars are the source of their power and therefor quite a vulnerability to the witch as a class.