Hi,
Just thought I'd put my 2 cents in here. I would say you need to build his self confidence. By having him feel stress and pressure as a young dog(having your friends act like they were hurting you, and hoping for him to respond)you will cause him to be too insecure and nervous. He's a young dog, a kid, he has yet to develope mature defense drives. I would socialize him, but don't force interactions, it will only make him more uncomfortable. Build his self confidence, take him everywhere, let him see everything. Let him see the world, and the people in it as safe. The best most powerful dogs as adults are the ones who are self confident, ones who do not feel that everyone they meet might be a threat, ones who feel comfortable in every and all situations, not ones who are just waiting on their last nerve for something to happen. Have fun with him, let him be a kid, let him learn about the world. This type of experience is what will make him a self confident, balanced well adjusted adult who can handle any situation.
If you haven't already I'd find a good trainer in your area, do some fun obedinece with him, not a lot of pressure, set him up to succeed and he wil! Don;t set him up to fail, because then he will fail.
As for doing a CGC, why not... but work on his confidence first. More than likely if your worried he'll do something bad, he will, he'll pick up on your feelings, and he'll feel threatened or nervous and he might well act out. Don't rush it.
As for the barking, you say he barks if outside alone, and someone approaches. When else do you want him to bark and why? Believe me, I spend more time with people trying to get rid unnecessary barking! I wouldn't worry too much about barking, or should I say encouraging barking, worry more about getting and keeping his temperament confident and stable. Hope this helps!

Canine good citizen is a great start, don't give up on that. Any dog that has been socialized can do this.

Many dogs feel uncomfortable being petted on the head by strangers when on lead; especially if the stranger approaches directly from the front. Touching a dog's head is a dominant gesture, and being on lead makes many dogs feel like they have no escape route. Your dog's growling in this instance is meant to drive the stranger away. If it does not work, it could escalate to a bite. When he does this, he is afraid because he feels threatened.

I wouldn't force petting on him in these situations. I would strongly recommend that you get into a basic obedience class, preferably with a trainer that has some experience with aggression.