Thanks for your thoughts about Thor. He is fine, I'm just getting used to the idea. I had this fantasy that he was indestructible, and I'd never have to worry about problems like pancreatitus, or liver shunt, or whatever. I don't really know how to explain it.
Anyway, back to your noisemakers!
It sounds like you have a good plan. Bottom line, it's repetition, right? I think what makes it so difficult is there is that split second between "I notice a potential concern" and "I WILL KILL YOU! KIIIIIIIIIIIIIIILLLLLLLLL YOU!!!!!!!!!" Once they are on thought 2, it's really hard to bring them back.
I do think that overall, Thor is better. I'd say he's gone from barking at maybe 75% of the dogs he passes to maybe 25%. It's hard to really quantify, but he seems to know that passing a dog sedately gets him a treat.
My feeling about holding his mouth shut is that it will probably frustrate him more, and be counterproductive. I have my own version of this: I put my hand on Thor's face so he can't see the object of his loathing (though of course, he can still hear and smell), and I say Sssssssssssh. I don't remove my hand until he's quiet. But honestly, I don't think it makes much difference. Maybe in some cases when he's not 100% over the edge.