i don't know if this is going to be helpful but...I think you really need to think it out and decide what to do and then just do it. If you want to do CIO (which I don't think is cruel, by the way) then consistency really is key. Because it is mean to teach them that crying sometimes gets them what they want, or sometimes crying for 3 hours works, and sometimes it doesn't. I think Ferber's method is good - going in in consistently longer intervals to calm them down. CIO is really awful for everyone involved, but it works. And I promise, they still love you in the morning.
Before you start, definitely check to see if he's teething, has an ear infection, etc. The first few times we tried to Ferberize our daughter she had an ear infection. That sure made us feel like terrible parents!
If you decide to do a no cry method, then it's important that you buy into it too, because it means less sleep for you. Also, if your wife doesn't want to do CIO, then she needs to take some responsibility for getting up. It's never fair for one parent to lay down a dictate that the other one has to live with.
Finally, I would handle "nap sleep" and "night sleep" as two separate issues to be tackled. Sleeping well at night was always more important to me, so if my daughter wanted to nap being held, then that's what we did. But nighttime she was on her own. Once she got that down pat, we dealt with naps.
Do you have a carrier you can put the little one in during the day so he doesn't have to be so clingy and can do some dozing? The last thing that I found was that they sometimes get into this cycle where they're so overtired they can't sleep and then they get more overtired, etc etc. You might want to take a couple of days to "reset," doing whatever you can to get him to sleep, and hopefully get some sleep for yourself, so you can have a clear head to do whatever you think is best.
Good luck!