HI S.,
Sigh...I know exactly where you're at. Do you let him watch any tv or movies (like Disney or Pixar)?
We have gone through this with our son who is 41/2. He is just as you describe; sweet cuddly, hug and kissable, however, he is a big , strong, active boy who likes to wrestle and doesn't yet know his strength or limits. I am not a big time-out person, but several months ago I started to impose them and they helped a bit. They aren't really punitive, just an imposed break for him to settle down and not continue aggressive or inappropriate behavior. I believe that several things cause our son's behavior. We have found that sleep (or lack) is the single biggest contributor to negative behavior, hunger is second. And he also seems to get overstimulated and then doesn't know how to come down from that.
In your birthday party scenario, I would have done this... Upon seeing him purposely bump his classmate, I would have walked over to him and kneeled down to eye level. "John I saw you bump into Bobbie on purpose. I need you to come sit quietly with me for a little while." Sit with him and talk to him about what is happening at the party and see if he settles down a bit. ( If he throws a fit because he has to sit with you tell him that he needs to settle or you'll go sit in the car.) When he feels calmer tell him that he can now go back to the party, but he needs to be gentle with friends or he won't be able to stay. I would only give one warning and I would try this method to see if he actually needs your help to settle down. Sometimes words just don't do it when there's a lot happening.
Back to the TV and movies... We got rid of most tv and all of the movies. Our son is a visual and very creative little guy, and part of his behavior was acting out what he saw. He would pick out the lions fighting in Lion King or whatever could be remotely construed as aggressive and act it out, and he started to have trouble sleeping. All of his behavior and sleep problems decreased pretty dramatically once we stopped watching the movies. And don't get me wrong... it's not like he got to watch movies all day long. But a little here and a little there was enough.
I also read a great book that I have recommended several times, called Raising Your Emotionally Intelligent Child. It changed my perspective on feelings of anger and sadness and helped me understand and deal a little better with our son's "tantrums".
You might want to talk with the preschool too and ask them to be on the look-out for rough play with the bigger boys. It's inevitable that he's going to pick up things from other kids, but at this age it can be controlled a little more if everyone is aware that it's a problem. He might also feel somewhat threatened by the play even though he engages in it and not really know how to handle those feelings.
Good luck!