A good trainer will help. Since he obviously has fear issues you need to find a positive reinforcement (clicker or "cookie") trainer. You need to help build his confidence around people and dogs by helping to trust that YOU are in control of the environment. Also, RUN to the store and buy a Gentle Leader. You can also try D.A.P. spray and an anxiety wrap. I have found that when Loki starts barking at the dogs next door when they are outside I can put the Gentle Leader on and he will quiet down immediately.
You need to work on some controlled interactions with other dogs. Go out to a busy area and sit back - like 10 feet - off of the road/sidewalk. When you spot a person or dog start feeding him something REALLY good, like fresh chicken. When the person gets far enough away, stop. Cue him to look at YOU, not the person/dog, for a treat. Loki has a "watch me" command and I basically dangle the food in front of his nose when a big dog comes near. Amazingly, he's fine at daycare and around dogs he knows well.
Most importantly, you need to accept that 99% of this is going to be management. He simply isn't a dog that likes everyone when you are out. He's probably a doll at home in his comfort zone, but when you go out you have to understand he is nervous. Of course he is cute but people ASK to pet dogs for a reason, so that you can say "no, he's very protective of me" or "he's not in a good mood" People won't think he's a bad dog - they will think you are a good owner! Most of the time when kids ask to pet Loki, and I don't know the kids or if they will grab his face or whatever, I put him in a sit and ask him to wave or roll over or do a trick for them - from a short distance. I say, "No, but he can do a trick for you, do you want to see?" and of course they do. Then Loki waves to them and they giggle and move on. That's management
