Hi XXXXXXX~
The lump is something that could have many causes, however the most likely culprits are: inflamed lymph node, sebaceous cyst, or a lipoma.
Here's more reading on lipomas and other cancers: http://www.thepetcenter.com/exa/lumps.html
On cysts: http://www.petplace.com/dogs/sebaceous-cysts-in-dogs/page1.aspx
On lymph nodes: http://www.peteducation.com/article.cfm?cls=2&cat=1614&articleid=319
The only way to positively identify what sort of lump or bump your dog has is, unfortunately, also through a trip to the vet. A fine needle biopsy (where the vet inserts a needle into one of the bumps and tries to aspirate/pull out material to look at under the microscope) will tell the vet, without question, what sort of problem your dog is having.
That being said...since your dog is a small breed of middle age, my best guess is that he has a sebaceous cyst. These little growths tend to pop up on small breed dogs pretty frequently (my own Maltipoo has one right between his shoulder blades).
Although they're bothersome, sebaceous cysts are benign growths, which means they don't spread to other organs or cause any real trouble. Vets don't generally remove them unless they become big and bothersome to the dog.
The biggest bother with these types of cysts is that they don't go away unless they're removed completely. Draining them over and over can help keep them small and non-obtrusive, but to get rid of them completely, your vet needs to excise it.
If this were my dog, I'd have my vet take a peek at it, just to make sure that we're dealing with a cyst, and then if he gives a definite diagnosis, I think I'd just leave it alone until it becomes painful or bothersome to the dog (which they rarely do).
I hope this helps.
Certified Veterinary Technician
Associates Degree in Veterinary Technology. State and Nationally certified.