Same as Jo and Caleb here. C will typically not fall asleep if I'm in the room and just like you mentioned, it prolongs every thing and makes the OT worse. But, when she's ill, she will get very relaxed if we rock and sing together, then I put her in her crib and rub her back for about a minute or two and she's out. It does take longer, so I try to start everything a little earlier.
Like others, she has a hard time falling asleep with me in the chair, because it's just not so comfortable any more. Often she'll point to her crib when she's ready, or I'll just let her know, it's time to lie down now, so she can get comfy. Usually, she'll go in well, and fall asleep quickly, but sometimes we have to do it more than once, particularly when she's stuffed up.
It's a hard call, I know, but if he really won't settle with you in there and you've given him meds and done everything you can, then you might have to leave him too. If he's mantraing and not really agitated, I wouldn't worry. I always tell myself, ultimately sleep is going to help her most.