At the end of your last breath, place your finger over the hole and take your lips off the bottle. Gradually release the pressure of your finger. You found that you could blow up the balloon in the bottle with the hole in it. You wouldn't have had much luck with the other one though. There is nothing wrong with your lungs.
Air takes up space just like anything else.
When you blew up the balloons in the bottles, you were trying to push air into a limited space. There wasn't enough room for the air in the sealed bottle as well as the extra air you were trying to blow into the balloon. You could blow up the balloon when the hole was uncovered because air escaped from the hole and made room for all the extra air you blew into it. So you were blowing some air in the top but some was also escaping through the hole. You saw the reverse happening when you blew up the balloon in the holed-bottle and then put your finger over the hole.