Hi Michaela,
Ben gets night terrors on occasion, and they seemed to peak whenever he was transitioning to less naps (i.e. from 3 naps to 1, 2 naps to 1, 1 nap to none). It's probably associated with getting less sleep, like you said. We would just put Ben to bed earlier to try to avoid it. Sometimes it worked, and other times it didn't. I think it was just his body's way of dealing with the fatigue, if that makes any sense
I didn't pick him up. Instead I just stayed by his side and rubbed his shoulder until he was done. I know you're supposed to just let them go, but I at least wanted him to know that I was there. Once he finished crying I just lay him back down, tucked him in, and he'd be asleep again in no time. Trying to talk to him or "handle" him during the episode backfired, as it would just get him more riled up.
When your DH turns the light on, does it wake him up? Or does he just calm down and go back to bed?
I don't know if this is of any help to you, but I just wanted to let you know what we did. If it's any consolation, it hasn't happened in about six months. I guess his body has adjusted to no longer having a nap in the afternoon. Maybe the same thing will happen for Khyan.