I'm having a similar issue with my older female dachshund and beagle with the new dachshund puppy. He (the puppy) wants to play and the older, grumpy women don't want to be scratched and nipped. My female dachshund will growl at him and if he doesn't stop she will flip him on his back and pin him down until he quits it. She's teaching him who is alpha and what behavior will, and will not, be tolerated. Over the past week he's learned not to mess with the grumpy old woman.
As Jaybay said, as long as there is no real fight you need to let them establish their boundaries.
Baloo's behavior sounds more playful than aggressive. It appears he wants to play with Fuzzy, and Fuzzy doesn't want anything to do with him. I suspect Fuzzy understands that Baloo is simply acting like a puppy, and also understands he shouldn't slap him around much. As Baloo gets older, Fuzzy will have no problem defending himself. As long as it doesn't turn into an actual fight, don't worry about it. They have to sort out their pack order on their own, and that is entirely normal.
Stop picking up Fuzzy and removing him from the situation. He is learning that messing with Baloo is something that will earn him your attention. If the playing/ fighting gets beyond what you are comfortable with, you need to intervene.
Have you ever seen mother dogs discipline their pups? They get body slammed to the floor if necessary, or even get a little nip as a warning when they misbehave. You are now in the position of playing mother dog, so you need to imitate that behavior. A firm tap on the neck with your fingertips should bring Baloo's attention to you, and off Fuzzy. Add a firm "NO" to the touch, and keep it up until Baloo backs off. You want to see him actually turn his eyes and head toward you. You may have to do this once, or a hundred times before he understands you mean business. You can use this technique for any unwanted behavior as well.
Give Fuzzy a chance first to deal with this on his own, and don't be frightened if Fuzzy just flattens Baloo. Watch carefully and you'll probably notice that the older dog won't put a tooth or claw on the younger one. He'll use just enough physical force to stop the unwanted behavior.