1. Do not "soothe" him when he appears frightened. When he barks at a safe object, like the plastic bag, take him to it, go up to the object yourself, first, tap, touch, even smell it, and ENCOURAGE your pup to interact with it. You may have to step on it, make it smaller, etc, to get that done.
2. When he is barking at someone (a person) basically drag him up to the person, but be jolly about it. You give the person a treat to give to the pup. Give the pups leash to the other person, and have them walk him a bit.
3. The biting of you, while a normal reaction, is unacceptable. He must not bite when he's hurt, especially since you have children. Start working with this now, by tying him up to a chair, or something solid, and "feel" him all over. Do this several times a day for about a week. Then, do the same thing, but gently pull on his tail while telling him good boy. pinch his ear a bit, rough him up by brushing his hair coat the opposite way. Try to build his tolerance for "bad touch". If you run into trouble with this, reach out again, and we can go further into how to do this.
Are you local? You are welcome to come out to our classes on Friday nights for socializing. No charge. Make sure he's up to date on his kennel cough or bordetella vaccine. Please bring him on a collar he can't slip out of, and a nice, six foot leash made of leather, or similar. No chains.
Try some of this, and see what works!