I agree with everyone, mouthing or play nipping is a very, very common puppy behaviour. Cassie was still doing it when we got her in February and she was 22 months old at the time. She should have learned by then not to, but she was the very pampered baby of an elderly couple and I just don't think that they'd set a lot of limits for her. We dealt with it by just saying the high pitched "ouch" that was mentioned, followed by a firm "no", then we pulled our hands away and turned our back to her for 10-20 seconds. The very gentle training methods have worked very well for us. The play biting decreased quickly and she's very gentle with her mouth now. I think that since dogs really want our attention and they want to please, that by ignoring her for a moment, that made the most impression.
Spazz is an adorable puppy and I'm sure that he'll learn quickly too that you want him to be gentle.