This is a tricky situation. While I generally think that your system for picking books is acceptable (you alternate who chooses), I do think that it's wise to consider vetoes in some circumstances. An example would be if something is a trigger for one member. I don't know if this was the case with this book/person or not, but it is something to keep in mind. Keep in mind that something that is "ghastly" as an abstract idea is a heck of a lot worse to someone who is going through it (or who has gone through it). Reading about it and then discussing it with others could go way beyond "challenging." It's one thing to have a book bring you to tears, it's another to have it give you a panic attack or breakdown. This may sound like an exaggeration, but PTSD is a very real thing.
Assuming that this isn't the case here (and perhaps even if it is, though that's not a very sympathetic thing to do), there is one alternative you didn't mention: let the dissenting person sit out for a month. If someone objects to a theme or topic, they can take a one-month break.
Because the book club has multiple members (and the discussions aren't going to be very good if one or more members doesn't actually read the darned thing), it might be wise to ask whoever's turn it is to come up with three choices and then try to come to a consensus on which one to read. Another idea is to pick a genre and ask everyone to bring a suggestion within that genre and then figure out which one the group wants to read. If someone has a serious issue with the book (say, they won't be able to buy the new release hardcover version, there's a theme that is actually traumatic for them, they don't think they'll be able to read a twenty-five-hundred page book in a month, etc.), they can bring it up in discussion.
As for dealing with your boss, I'm assuming that you used hyperbole in recounting your interactions. If not, I think your tone was quite combative. I wouldn't speak to a peer that way, let alone someone who employed me. Yes, if this book club isn't part of your work duties and the boss let you organize, he should step back. However, I'd assume that the reason he brought it up with you is that one of the other book club members went to him instead of you with a concern. Tell him to ask members to go directly to you with their questions and concerns.
An aside: I really don't think the point of a book club is to "read things that make you uncomfortable." Read new authors and genres? Yes. But I would quickly leave a book club if it seemed like the organizers were going out of their way to pick the most upsetting books they could find.