A.,
Job well done on establishing leadership in the house, as it makes life so much easier on the dogs.
I am a professional dog trainer, and one of my personal favorite commands, as well as a very popular one with clients, is the "place" command. We teach it to mean go to an object that is different in height and/or texture and remain there until released. Most common "places" are dog beds, rugs, etc. You can have a different "place" in each room if you wish, or a single "place" that you move from room to room as needed. Use it when your son is crawling around and your dog is having a hard time keeping his herding instincts in check.
I would allow a calm greeting to your son from your dog as long as there is no licking involved. Teach him to lick on command (give kisses), and only ask for them when you are able to control the situation, and your son will enjoy it. Later when you son is able to talk, he can ask for them himself. I would avoid doing anything that seems like your are making your son discipline your dog. It could easily come across as threatening to your dog, and in the event he would try to challenge your son's "authority", your son will be unable to defend himself.
Don't be afraid to use baby gates, or your dogs crate to keep both your son and dog safe when you are unable to supervise them both. Remember you are the parent, which means you are responsible for keeping them safe from each other!! :-) If you notice your dog getting stressed, give him a break. Put him in his "safe zone" with a stuffed Kong, or chew toy and let him have a little peace. Even 5-10 minutes can do wonders.
Lastly, give your dog a positive outlet for his natural herding ability, energy level and drives. If you don't have access to livestock for herding, try agility, rally, or just teach him advanced obedience and tricks for fun, but work on it daily with him. Have him help around the house; pick up his own toys, pick up the dirty clothes and put them in the hamper, help walk the baby to the park (when it warms up), etc. Trying to squash his instincts will lead to one very frusterated dog, but give him a real job to do and he will be the best dog you'll ever own.
Good luck!!
C.
www.laddk9.com