Hmm, if your instructor is telling you to whack him across the muzzle with a newspaper, you need to find another instructor double quick. Just because he is an instructor doesn't mean he knows what he is talking about and this guy obviously doesn't.
By whacking your dog, you are actually teaching him to hate all other dogs. He believes that it is the other dogs presence that causes him to get punished because thats the only time it ever happens in his view and so he tries even harder to drive the other dog away before he gets whacked...hence a higher level of aggression towards them.

Dogs no not think logically like humans and you can't exactly explain to them why they are being punished so it is all too easy to make behaviour worse or cause a new problem behaviour by using punishment methods.

Think about it this way as if you were your dog.

Whenever another dog approaches, my owner maybe pulls on my lead more and tenses up or starts speaking to me in a negative tone. He must be doing this because of the other dog and so he must be frightened of the other dog and if he is, then I should be too because it is obviously a threat.
If the dog gets too close, I try to drive it away because it is a threat. My owner starts to smack me with magazines and shout at me. This only happens when there is another dog and it gets too close.

Next time I see another dog, I'll try to drive it off earlier before it gets that close and maybe avoid being shouted at and smacked like I do when it does get too close.

He does not associate the punishment with his behaviour towards the other dogs. This is the problem with punishment. It often teaches the dog the wrong thing. As you have realised, hitting him with the newspaper has not worked and so this proves that it is a very innaffective means of solving the problem.

I seriously suggest you look around for another obedience school. That instructor sounds clueless to me...and there are a lot like him around so make sure you do your shopping about.
Your dog needs to learn that other dogs are a prelude to nice experiences not punishment and then maybe he will learn to trust them and enjoy them a bit more.

Neutering won't be of help to a 5 year old because any behaviour associated with harmones will now have become learned and so removing the harmonal influence will make no difference.
Neutering males to curb harmonal aggression and such is only likely to work if done when they are younger...under 3 years of age.