It would seem to me that even though you might be interested in continuing a great conversation without any possibility of sex or exchanging numbers at the end, if you tell him that you’re not interested in those things, the conversation will probably not continue. What’s the point? And besides, if the conversation is so great, what would be the reason for ruling out the possibility of anything romantic? I guess if you have a significant other already, then I could see it, but why are you in a bar striking up conversation with strangers? Not to say that interesting conversation with a member of the opposite sex (or, the sex you’re interested in dating) always has to end with sex or the hope of a date, but in a bar isn’t that what most people are looking for? I would like to believe in a world where people could socialize in bars just for the sake of good old conversation, and at the end of the night go on their merry way feeling better inside because they connected with someone on a deep level without stumbling home drunk to screw them. But it seems like in reality, most people frequenting such locales would probably be disappointed with that.
To answer your queries:
1. I would let him know as soon as you realize. This something I have a hard time doing in any situation, romantic or not. Asserting oneself and clearly stating what you want and don’t want can be difficult. But if you’re gifted enough to do it, I wouldn’t waste time in telling him so that both of you can move on to other people who you might feel a better connection with.
2. If you’re already engaged in a conversation with him, I don’t think body language is going to do the trick. In my limited experience, men/people in general sometimes have a hard time with subtle hints and need to be told straight out, “You know what, I’m really just not interested” before they’ll actually leave you alone.
3. I say just cut him loose. No reason is necessary. In bars, people get hit on and shut down all the time. I think it comes with the territory. Just do it and move on.