JAck Russell Terrier behavior

Question
We adopted a Jack Russell Terrier who had been found in a trash can with his mother in Puerto Rico and then brought to the New York (how he made his way here we are unaware but we have a suspicion that he was grabbed and crammed into a crate along with other puppies). He was really young when we met him about 5 weeks old we have had him for 6 months now and he has adjusted to being a part of our family. He is bossy, stubborn, loving, destructive, persistent, smart, agile and a great friend to your American Pit bull terrier, and our little clown.
The only issue he has is when family and friends come over our house he's terrified. He cowers in the corner and shakes (which breaks our heart to think about what has been done to him) but we want to know how we can get him to feel more comfortable when people come over? Will it just take time? Should we socialize him? What does it mean to socialize?
In addition he seems to be very aggressive towards our American Pit bull Terrier at times so much so that she cowers away (which is slightly funny since he's 14 lbs. and she is 65) how can we correct this so that he does not think he is higher up in the pack than she is?

Answer
i'm offering a link to my website: http://www.freewebs.com/dustycovens/behaviordominance.htm

there are multiple pages on multi dog households since I have multiple dogs I can offer alot of insight into the subject. I can say Jack russell terriers are dominanting little dogs and will try to boss a larger dog mine does he is 15 pounds and my labrador retiever is 80 pounds so its intresting. you cant correct him trying to be the more doninate one...they will settle it on there own. I can reccomend you have visiters offer him his favorite treats and throw or wiggle his favorite toys for him to grab and play with....it will take coxing to get him to accept people he is afraid of. My labrador retiever is so afraid of my brother in law he will go over to pet her and she will eye me and lean away to avoid him touching her! he sees her once in a blue moon and has never been agressive to her but she just doesnt like him...your dog may also not like the people your bringing into the home if they are overy noisey/tall/wearing hats or smell strongly of purfumes.