Hi hon, sorry I haven't replied in a while, I wasn't feeling well last night, so am just getting onto BW this afternoon. Yes, that is technically how you drop a DF, but I think if you just kept bringing it back until you got to 9:30 or even 10 pm, I'd just give it a go one day and not do it. Since he's young and still taking several good milk feeds, I don't think you need to bring it any farther back than that. Or, you could just stop cold turkey and resettle at that time if he wakes.
As for your ah-ha moment, I really think there's something to that. I can understand your hesitancy of not wanting to wake DS1. If you'd like to see if you can get DS2 sleeping better stretches at night before moving them together, do you have something you could use for white noise to try to drown out some of DH's noise (like a fan or something)?