Thanks, Chip . . . will give it a read!
My post sounds a little funny to me reading it back to myself . . . and I'm sure some reactions will be "well, sure--you bought a GSD and what did you expect/want him to do?" Part of the reason we got the shepherd was because I have always liked the breed and I did want to have a dog that I'd feel gave the family some protection. So maybe the simple answer is: well, nobody gets in a position to pet the dog if they don't know him. My previous dog was a golden retriever--and she probably would have given a burglar an escorted tour of the house she was so friendly.
I guess the nipping thing is what I am most concerned with. That it's not a "back away" bark or that he moves away--and that there might be some aggression there that I need to understand and get ahead of. But maybe it's just natural and expected to some degree? That he'll need to be on a leash and just have people keep their distance and position him better or muzzle him if we go to a dog park or something--which he likes to do.