Lost, I am glad that you are getting angry.
About your DS. Try not to worry. So much easier said than done, I know. He sounds a wee sweetie, and in a proper shy phase at the moment bless him. I bet he grows up to be a wonderfully astute and sensitive chap! And he only started nursery recently too, don't forget that - he IS still adjusting. He'll have up and down weeks for a bit yet I'd think.
Yes, he probably is picking up on the atmosphere in the house at the moment - of course he will. I note however that from the little you've said, sounds like your H is the one doing his best to create that atmosphere - you're having to tell him not to raise his voice? Really? So he's got the gall to be an angry twat too, has he?
I feel another stab of anger at what is pretty much another pressure tactic. Your H knows that another way to get you to put up and shut up is to cause a bad atmosphere, so you get protective of the childrens' right not to hear this stuff (i.e., be a good parent!) and you try and calm the situation. I guess at the moment you're not so willing to do this. Does that mean that your H steps up to the 'parenting plate' so to speak, and modifies his behaviour a bit -thinks of the children first? Not at all. No, he's going to stamp and shout, make the kids just a little bit anxious, deliberately do that, use the kids' distress as another way of subtly pressuring you to drop your stance. On his fucking cheating!
You must be massively stressed by all this. I would urge you, again, to think of the bigger picture. Putting a plaster on this won't work for the children either. Growing up in a house of lies, distrust, and resentment - that isn't the recipe for a good childhood. I haven't been in the situation of separating with children but I know that many with first-hand experience of that will be able to come on here and share their experiences. From what I have read, few regret a split in terms of the children.
It is disgusting on another level that he is behaving like this in front of them - their welfare also appears to come below his need to get his lies believed so that he can go back to having his cake and eating it, just like your peace of mind.
Your DS will be fine because he has a LOVING, CARING, EMOTIONALLY INTELLIGENT MOTHER. Don't be afraid.
If you're exhausted take a night off from all this. You don't have to talk to him. You don't have to engage. Speak to friends. Gather strength. There's no clock ticking on your decisions. I would say again that he needs to leave and I think in order to get to that point, you need to get advice on where you would be financially. Maybe that's the next step, get advice, do some sums.