One question glares out from the above, OP: you say only your OH knows if your DS saw some porn (or saw that his father had an erection) - so have you not asked if DS actually saw some? Is he prevaricating about answering that? Because even if his answer is that he doesn't know or can't be sure, then that's disgusting enough as it is. If he won't tell you, that's chilling.
I want to say that you have done all the right things - except the only thing that really matter, which is removing the risk from your children. On paper, all the contacting you've done is really good, I will not take that from you, HOWEVER - why is it you doing it? You've done nothing wrong. You're not the one with dubious sexual boundaries around children. You're not the one who chooses to not control yourself. By doing all this, you have made yourself responsible for him, for his behaviour, his deeply troubling sexual problems and urges, for what happens to him. The way y talk about him shows that you are incredibly invested in feeling responsible for him and his life; you've talked more, and more passionately, about how tragic things would be for him if you kicked him out, than you have about your son. Practically, you are appearing to be doing a lot for your son, by talking to people, but what have you done, or are doing, for him emotionally? There is no grey area about the fact that you are prioritising your OH's welfare over your childrens' when you keep a man who would search for, loom at, and get aroused by, porn, in their company. The fact that he is their father doesn't make it better than if a stranger had done it, in fact, it's worse.
I also want to reiterate something Stooshe has been getting at: why can you not grasp that if you are having to talk to nursery, SS and others about your OH's sexual behaviour around your child, putting all sorts of locks and passwords on the internet-enabled devices in the home, and more, then things have already gone too far?! None of these things should even have to enter your mind in a normal home where children are not as risk!
You are talking the talk but not walking the walk. You're choosing to do the external things that matter, like talking to SS, but you're refusing to actually protect your children.
I would be interested in knowing about your relationship in general. I bet if you opened up about it here, or on another thread, there'd be more red flags for crappy, dubious, abusive, etc., behaviour towards you at least, than at a Chinese Communist rally. Things like this incidence do not happen in isolation, behaviour like this is not a one-off. It'll be the culmination of slowly growing shitiness on his part, I'll bet anything.