I think what you are doing is fine, because you can take a gw approach and start to lesson the back rubbing as you go along. So if you feel comfortable with that and it is working then I would go with it but it is important that anyone else who puts him down is consistent as well.
In all likeliness teeth are probably involved somewhat. We actually didn't have trouble with 2yr molars, but we had this kind of behaviour with canines, and lots of moms have said that 2yr molars were horrible for them as well. Darn teeth!
There is probably some sleep regression that goes along with developmental leaps around 2yrs as they are common around birthdays and half birthdays.
What is your wind down like? We had to adapt ours when DS1 was around 2yrs just to make it more age appropriate, and it really did help with our settling issues at the time. So we actually made it longer and more relaxed, and let him decide more what he would do with the time. So instead of having bath then heading to his room and doing his entire wind down there, we would let him come downstairs, maybe watch a show and have a bedtime snack and milk, then put on pyjamas, brush teeth, read some books, and finally up to bed where we might have a quick chat or song before tucking him in.
It does help to remember that it is likely a phase and if he slept well before than he will again once it passes. The less AP you can use, the easier it will be to get back on track. But in my experience, once an LO has developed really good sleep habits, they usually return to them again.