teefae, from what I have read it seems that the biggest point that alot are trying to get across is crate training. I have crate trained my pups from day 1 and they sleep there at night. I have 2 big dogs a pit and a siberian husky and when they are together it is indeed a day at the races through my house and you can only imagine the damage those 2 could do.
Disiplining a animal is really a hard task, they are like little kids and will test you and keep on testing you. I have on occassions swatted my pups and yes may feel bad afterwards but sometimes you do what you feel you need to. There are a great many people here who dont agree with swatting at an animal (I like the word swat opposed to hit) then there are those who agree that maybe there is a time for it. Remember, you are the ALPHA
and the rules are the rules. Seperating the 2 dogs during treat time for a bit might not be a bad idea. Sounds like the yorkie likes to rule the roost so to speak.
Try the crate at night. You need your sleep also. If you dont get it you may find yourself stressed out to the point and wanting to remove the animals (I really dont think from your post that it would happen) but none the less you need your sleep as much as your pups