I'm going to stick my neck out here and make a diagnosis and recommendation.
I believe that your fish has an infection in the tissue there on the gill plate, and it could possibly be causing swelling of the tissue internally, possibly extending into the nose, throat and/or mouth.
It may have started with an injury to the skin that opened the way for bacterial infection. The stress of the aggression from the DG could have weakend his immune system, making him more susceptible.
If you haven't noticed breathing difficulty then probably the gill may not be affected.
I am concerned that this is an infection. I base this on the fact that he wants to eat and seems hungry, but spits food back out and he's losing weight. Though the bump does not appear to be larger, the swelling may be extending internally. His behavior has changed, as well.
I enlarged your photos and looked closely and could see the bump fairly well. It looks disturbingly like the bump that was on another fish I've seen not too long ago.
Another AC member, can't remember his name, had a Celestial Pearl danio that had a bump on his head, forward and just below his eye, that started out like this.
The bump got slightly bigger during the illness, but not much bigger externally.
The fish gradually went downhill, though at first the fish seemed to be not bothered much, just as your fish.
A post mortem photo of the CP danio showed the bump had come to a head, actually two pinhole sized points, though didn't rupture, and the whole area was slightly reddened. It looked to me that the swelling had affected mouth and throat area, internally, preventing the fish from eating.
The fish didn't develop other signs of external or internal infection, such as; red streaks on the body, red blotches on the body or at the base of the fins, or red streaks in the fins. He just couldn't eat, looked like he didn't feel well, and he finally succomed to the illness.
I would get Furan-2 if possible and begin treatment with that in the hospital tank. Binox, also, is a very good, strong antibiotic that would be a good choice if you can get it. I would keep his water pristine. Most meds can be dosed, then 24 hours later you do a big water change and dose again.
Furan 2 and Binox both contain Nitrofurazone. Nitrofurazone can be combined with Kanamycin (Kanacyn) for an extra strong attack on this.
You could just watch the fish for a few more days, keeping his water absolutely pure in his QT, but I believe that jumping on this quickly will give him the best shot at recovery.
Another antibiotic, if you can't find the others, would be Maracyn II. (Not plain Maracyn)
There's a chance this could be a parasitic worm under the skin, but nitrofurazone would also help with that if this were the case.
