Two things immediately crossed my mind when I read this post. First, your DH needs to stop playing with the puppy that way and second, the puppy needs to somehow learn that using teeth on human bits is never okay.
I know what you're saying..."no kidding, Kate! Duh!"
*sigh*
I think obiedience training for both of them *is* a good idea. I'd recommend something taught by somebody who really *knows* dogs and their behavior, though. It has always been my understanding that humans should not play with dogs like dogs play with each other. I know I always cringe when I see humans rolling around on the floor wrestling with a dog. It just doesn't seem like a good idea to me. I mean, I *love* my Boxer like crazy and don't think for a second she'd hurt anybody, but I wouldn't wrestle with her if you paid me. She's stronger than I am and her teeth are bigger.
Good luck with your puppy. I'm sure he just needs to learn to trust you guys. Gentle and easy seems the way to go.