It sounds like Ollie has hit "the stage" of biting. Good news is that it will probably pass as he gets older, though it certainly cant be ignored now.
I think you're right that picking him up when he bites is not a good way to deal with it. To Ollie, he finds that he gets held and cuddled when he bites. So he'll bite whenever he wants a cuddle, and cavs LOVE to cuddle!
When you're playing and he starts to growl and bite, give him a stern No! If he continues (and he probably will) end the game. No play. Period. Ignore him. If he continues to nip and bite at your feet (and he probably will) you will need to put him in time out. An xpen works well for time outs, but a blocked off kitchen or bath is also a good idea. When he is calmed down, you can let him out again.
You'll also need to make sure that he has plenty of good chew toys at hand, so that if he's not excited and playing but just wanting to bite, you can redirect his behavior to an appropriate object.
Cedar (tri), Willow (blen), & Holly (ruby)