Hugs mama!
It does sound like it could be night terrors (there's info
here, and it's a sleep disorder completely seperate from traditional nightmares that may have nothing to do with the energies of the room). I'm totally on board with cleansing and warding a child's room, but if that doesn't help you might look into night terror treatment as well.
I had a similar question about a year ago... many of DH's female relatives are pretty active mediums and it seems like dd2 may be following in that path. She'd see things and get upset but not have the words to explain. I got a lot of great advice here and from DH's family. So I hope some of this info helps you too!
For cleansing I like to double or triple up my normal chores. So instead of cleaning with plain soap/water I might add salt and herbs to the water to cleanse on a spiritual level at the same time. For deep cleansing I'd first open the windows and doors and make plenty of noise in the room... your little one might enjoy this too! Bang on pot lids, clap hands, stamp feet, ring bells and basically make a big ruckus. Stir up the energies and shoo them out the windows. Then sprinkle salt and herbs (I like rosemary) on carpets and vacuum it up, mop exposed floors with a salt water/herb blend, wipe down the walls with a cloth spritzed with the same salt/herb mix, wash the windows, wipe the light bulb/fixture. And don't forget closets and under the bed and corners... places where energy can puddle/stagnate since there isn't a lot of activity.
After the actual cleansing I like to put up wards. I light a candle and shine the light into every corner and space in the room. Leaving the candle burning I use a little essentil oil (you can use anything really, but I think the smell helps) to seal the doors, windows, outlets, computer screen, tv/radio, any entrance to the room. (sealing... some people draw a tiny rune or symbol, others just swipe the oil on with a finger). I visualize peace/comfort/rest filling the space the way the candlelight fills it, and the way the scent of the oil fills it.
Overall, I think involving your little one as much as he is comfortable will help since he is the one who needs to feel secure in the space. So perhaps explain that the noise making is getting rid of the sludgy energy and making the space more exciting. And then perhaps let him splash some of the salt/herb water around or wipe the walls he can reach. If he's old enough he might carry the candle later, or you could add a bell or incense (scent he likes) to that step and let him ring the bell or waft the incense around.
Finally, he may want to make a special item to sleep with. I remember when I was little I had many many nightmares about rats... I eventually sewed up a little cat (stuffed with rice, hops, and lavender) to keep away the dream rats and it worked! So perhaps he'd like to draw a picture of a "protector", or make a small figure he could hold, or write a bedtime story that makes him feel protected or secure. There are also meditation cds written for children and using one before bed might also help him process the day and lead to a more peaceful sleep. Or you could guide him on a meditation journey to explore the animals he has mentioned, only in a non-threatening manner where he is in control.
Good luck! Hope your little sleeps peacefully soon!