Thanks for posting and giving such a detailed explanation of the issues you are having. Lets take them one at a time.
Q. He barks at every new person and dog, and I hope that is normal. He stops once they get closer and he can sniff their hand, but it definitely makes other people nervous.
A. That is a natural trait of a Caucasian Ovcharka - they bark to warn the "intruder" that they know they are there and to also signal a change in attitude.
Q. Should I just let it happen, and with more socialization will it go away?
A. Let it happen but when the dogs alerts you can talk to him and let him know it ok - that may not change his attitude but at least he will understand that you see the "threat" and is aware.
Q. He snapped at someone today, but the person did run up to him while he was still doing his warning barking, the puppy tried to back up to me, and he tried to touch the puppies head and it snapped at his hand (this individual has some problems with ADD). Is that okay?
A. If he wanted to bite he would have - the snap was a warning and is to be expected. When he gets older you should be more vigilant and not let people run up to your dog or that could get serious.
Q. Also, he's never been on a leash before and he really hates it and he sits on the ground. He's getting a little better with it today, and I hope he keeps improving.
A. Yes, they typically do not like the leash but they learn fast. CO loves to be free to protect so they will resist the leash and the control at first. It should only take a day to get him leash trained. Make being on the leash a fun experience - going off property, getting a nice piece of food.
Q. Lastly, he's never been in a kennel, and as soon as I put him in it he poops. I've gotten him to pee outside and I take him out constantly. I've gotten him to poop outside, but only once. He'll explore, pee, and sit down or roll around. I've kept him outside for two hours, put him in his kennel, and he'll poop immediately.
A. Keep him outside until he poops... after he poops (in kennel) clean it and put him back in it. Keep him there until you think he is ready to poop again then take him outside. It may take some time. CO don't usually mess in their kennels but he is a pup.
Q. I guess my bottom line is: do you think he can be rehabilitated?
Thanks for rescuing him.