I agree with the others. It's good that you're using rewarding with training. Too often, people-because they're scared or upset- first resort to yelling or spanking just like they would react with a child that is out of control. But it seems like you're on the right track.
It's the little steps that'll be rewarding with him. Just like when you potty trained him and made a fool out of yourself when he would potty outside, you're going to have to make a fool out of yourself when he's going through behavior boot camp!
One thing we did with Gizmo, which I wouldn't recommend for your little guy until he's a little more comfortable, was expose him to people and we exposed him alot. We have an outdoor mall close to us and since he's been vaccinated, we've had him there and had little kids touch him, and play with him, etc. So, it's that constant reassurance that needs to be established with your little guy that you guys are there and it's going to be okay! He needs to have his trust re-built, which sounds like you and your DH are doing good!
Good luck, and keep us posted!