I am so very sorry that your little guy (and you!) had to go through this experience.
Yes, this is heartbreaking. No little person who can't understand what's happening should have to go through this. Yes, he can work this out and get past it, with enough patience and love from you. But he will need to process these big emotions.
What you have done so far -- the doctors kit, and the book -- will be VERY helpful to him. The doctor kit will help him work out the feelings through play. Tell him his bear is sick and needs to see the doctor and let him be the doctor. It will help him to feel that he is in control of the medial proceedings, and he will be able to show you, on his bear, how it felt to him. So this is a toy that you will use WITH him. Don't wait for him to use it. If the doctor kit scares him, help him giggle out that fear by having the bear be the doctor, and treat another doll, who tells the doctor to go away. Anything that gets him giggling about doctors is great.
The book will help him begin to understand something that's otherwise incomprehensible. Keep reading it as he gets older to help him keep taking this preverbal experience and putting it into words, so he can become less frightened of it.
The other essential thing is to welcome all of his feelings about this experience, so he can feel them now, in the safety of your arms. These are big feelings -- specifically the terror of being in pain and thinking that people are trying to kill you. When he was in the hospital, he was in fight, flight or freeze mode, which is where we all go in an emergency. That means he was in a state of panic. He is still there, mostly. Now the work is to help him "go off duty" and stop being in that state of emergency. To do that, you have to reassure him of his safety.
So when he wakes in the night, even though it makes you feel awful, even like you just want to run and hide, your job is to help him "tell" you about that experience, empathize with him, acknowledge his pain and terror, and reassure him that you are there now and will protect him. I don't know how you feel about a family bed, but I think it would really help him to sleep with you for awhile. I think the night terrors might diminish or even vanish, because what he needs is a sense of safety.
If that is impossible for some reason, you'll have to be prepared to run to him when he begins screaming. But once he is in panic mode, calming him will be difficult. He's essentially reliving the experience, like PTSD. You'll just have to empathize and reassure: "You're so scared...it hurts...it's scary...But Mommy's here...I will keep you safe...I'm right here...You're safe now....It hurt so much...But now Mommy is here and you're safe. You're safe now...Mommy and Daddy will keep you safe."
Luckily, once he feels those feelings they vanish. So hopefully your presence as he goes through this will help him work through the feelings. It isn't the nightmares that are bad for him. It's the feelings locked up inside. So as he shows you those feelings, they should diminish.
Remember that you need to do some processing too, because you're also traumatized by this experience. It will help you a lot to talk about the whole thing and express your own feelings and move from panic to relief. And that's not just for you. Your son will feel your relief as safety, as a reassurance that this nightmare is over and life can be good again.
With your help, your son will get through this. I hope the conclusion to this saga is speedy and easy, for all of you. Blessings.