I don't use the water bottle (a common petsmart training device) and don't think it would be a good choice for you. It has already become a game for him and he voices loudly when you use it. I just did intensive private training on a dog that had had a squirt bottle used on him and we had to stop the use of it as he was becoming very agitated by it. There is a better solution for you. Any command you use must happen that is why your "leave it" "no bite" isn't. It has to mean something, not just you nagging away at the dog. So when "enough" doesn't happen with the play you will snap a lead on Loomis (let him drag it around behind him in the house so you can step on it and redirect behavior) and you will tell him "Loomis SIT" make him maintain that sit for a few seconds, praising him the entire time with the words good sit, good sit (15 if that's possible" and then release him from that job with a release word such as "FREE" and tell him he's a good boy! This is positive dog training that is based on praising and teaching appropriate behaviors. Everytime he starts in bullying the pug and you say enough and he doesn't listen he will do a sit. Might have to do 200 sits the first day, but I guarantee you it will work. Just be consistant and keep at it. You are replacing his decisions of things to do with giving him a JOB to do, he is after all a working dog. He will learn to appreciate it and it will make you a wonderful leader in his eyes. He is really searching for some sort of leadership from you as the pack leader of your dogs.
On the question over bullying about toys. If my younger female wants a toy the Mateo has and starts pitching a "barking fit" the toy goes away, "thats it" (my command when I take it away), for a LONG time. Like atleast an hour. That is called a "consequence" for barking about a toy someone else has. He will learn that after a while. Then maybe the toys come back out and you have two. One you say is (and I use this command) "pug's toy" and this one is "Loomis' toy" and as you say each name give them the toy slightly away from the other dog. If the barking continues the toys go up again for that long period of time. Keep working at it and you will get there. The command to end barking is "enough" at our house. Enough, means that we have played enough, barked enough, had enough petting, These are things that you can do but we have had "enough" for right now. At my house "leave it" is for something we never do. No eating cat crap, jumping on people and dogs, etc. Just be clear & consistant with what you'd like him to do and not do.
Nano