Sorry to hear about your pup. That said, if the vet says the lump is not hurting him then I would try not to worry about it too much. At his age of 16, the surgery could be far more dangerous on your boy than just leaving the lump where it is.
If you are not certain your vet is giving you good advice you can always go elsewhere for a second opinion. Personally I think your vet is perhaps wise to let well enough alone at this point. I hope it all works out for your boy.