Since the poop problems have only been going on for a week or so...my gut says that there was some kind of irritation/viral/something he ate in the yard/etc. Generally I will fast my dogs for 24 hours, clear out the system, and then give then a bland diet like rice, a little boiled chicken, and some canned pumpkin. Slowly adding back in the kibble over about a week or so. This will sooth the digestive tract and allow everything to start working normally again.
While 38lbs at 7 months is small for a GSD (I see you rescued, is there any possibility there could be some mix in there?), a 14lb increase in weight over 2 months is not terrible.
Also something to consider is that GSDs are not built like Rottweilers. Rotties have that big barrel chest with a broad flat back. Many Shepherds that I have seen have a much narrower frame and it's not until they start to fill out later in life that they lose that skeletal look. I would need to see some pictures to more clearly evaluate your puppy.
These are some pictures of my dogs when they were 7 month old as a reference point.
Argos was a little heavier than I would like. He could probably have lost a few lbs in this picture.
Anka. She was a naturally slender dog. She didn't start to put on size until she was 18 months.
Cade
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If it continues...
Have you or your vet considered EPI? or maybe SIBO?
http://www.globalspan.net/epi.htm