Redsy: I hate to play the "devil's advocate" here because a rational person would find nothing offensive in the home business setup you described (and I'm downright envious about the pool
...It's hotter than fire down here in SE Texas) BUT, does operating a business or even having a swimming pool violate any kind of municipal ordinances or deed restrictions in your area? I'm assuming that if there was a problem with the pool, the permit would have been denied by the powers that be. I know of some "Nazi-style" homeowners associations which have absolute hissy fits if your grass is one milimeter too high or the color of your house is some unallowable color.
LK has the right idea. A few finely worded cease and desist letters from your attorney would provide your "neighbor" with a good pasttime activity.
There is also a lot to be said for the phrase, "good fences make good neighbors".
Best of luck to you in your situation. Please let us know how it turns out.