There are a few things that this could be really.
1, Establishing himself in the pack, mounting and humping are often a way of displaying dominance to other dogs, regardless of size.
2, The nibbling could be play and trying to engage the other dog in to playing with them.
Neutering could solve the problem, however one risk of this is that the dog could potentially go the opposite way and become MORE like this. Its best to channel the behaviour into something else. A distraction.
When he starts, quickly distract him by telling him to get off and instead give him something else to do, he's still fairly young so play is the best way. Play tug or fetch etc, or do some basic training in obedience so he will work for you.