Pugs do tend to have health issues. For example, this breed has stumped nose as a result of which they can develop respiratory problems. Also, their wrinkles need to be taken care of very well. They tend to develop skin problems if their wrinkles are not properly cleaned every day. Pugs are best suitable for cold climate.
If you want to keep a small breed, you can go for Japanese Spitz, they are small, very intelligent, very local, low maintenance dogs. Also, they tend to become excellent watch dogs. They can easily be trained and go well with other animals and children.