You should use $set eg:
Lookups.objects(pk="52d3a8e318fbaf0e1075de4f").update(set__schools__KEY=VALUE)
Updated:
If you want to set multiple keys then you can eg:
Lookups.objects(pk=x).update(set__schools__KEY=VALUE, set__schools__KEY1=VALUE1)
Taking a dict of keys and values - you can convert to a new dict and update like so:
new_schools = {"key1": "value1", "key2": "value2"}
set_new_schools = dict((("set__schools_%s" % k, v) for k,v in new_schools.iteritems()))
Lookups.objects(pk=x).update(**set_new_schools)