Sunshine - please keep posting as much as you need to. The people who are posting on here are actually people trying to say what they think is good for you - what they from know experience. You can come back as often as you like, you will still be able to get advice.
I understand you want to make it work. It sounds like you are a very loving person. And it must be wonderful to reconnect with something from your past.
As you want it so much to work, and I think that it is important to you, why don't you suggest that you stay in separate houses until after Christmas. That way you can see how the economy is going etc and you can perhaps see how well he is doing facing up to the problems of control. This isn't breaking it off, it is just checking with your instinct and working towards a future. It is a small amount of time compared with the length of time you could spend with him if you make a future work for you.
It is really hard for people to change, and under stress people revert to their foundation layer of personality. This need for control is unlikely to ever leave fully and you will have to be on guard about it. That does not mean that people won't try, just that you have to be aware that it is not easy.
I strongly suggest that you keep a diary or journal, either on Google docs or in a safe place which he cannot access. Do not tell him about this. In the diary or journal record all the highs and lows, the successes and the failures. You will be able to chart the times when you just caved because it was too much hassle and the times when he consciously went against his controlling instincts to enable you to blossom. Keep checking back on this regularly.
After some time you will see patterns emerging, and they will help you work out if he is getting better, getting worse or treading water. And if you are careful in your record keeping you will be able to see whether you are consistently challenging his demands or caving. This can be a helpful way of either reinforcing his positive change or warning you that there is work to be done - or that you need to get out!
Also, really strongly suggest - do not make his problem your problem. If he says that he has to be a bit controlling because he is worried about other men, that is his problem not yours. If he says he would be less controlling because less worried if you dressed differently, that is him trying to make his problem your problem. The problem is not how you dress, it is how he behaves.
Sorry for the long post, and I hope it helps.