He sounds like he's lacking some confidence. Could just be an age thing that he'll outgrow. The redirection method sounds like the best way to go with a puppy his age. He can't growl or bark if he's focused on something else, right?
Is there anything that really motivates him yet? A ball, certain toys, treats? Bring those along for the walks and grab his attention before he gets into bark/growl mode.
You also should get into a puppy class with a good trainer. I think they start puppy classes at like 12 weeks, so he's old enough. A nice structured and controlled environment should really help his confidence if done right.