I'm looking for any advice from other mothers who have children with asthma and the cough that flares up at night. Propping his pillow up hasn't worked, and eucalyptus oil in hot water in his room has helped a little. Its so scary
Yes, it can be quite scary. Some of the posters here have touched on some good points RE starting up some kind of preventer. I think that would be a good idea.

My DD has recently been put on ventolin as a preventative but the doctor said that asthma doesn't get diagnosed generally until after the age of 2.
This is true, we don't diagnose asthma until after 2, for reasons I go into further below. One point, though - ventolin should not be used regularly as a preventer. It should be used as a reliever during an acute attack only. If you are needing to use ventolin regularly because of asthma symptoms, then your asthma management plan needs to be changed and a preventer added. Regular use of ventolin can relieve acute symptoms, but there is research that suggests that it also predisposes the airways to hypersensitivity - so the more you use it to relieve asthma, the more likely you are to have attacks.

Do you have a nebuliser? if not hire or invest in one, they work much better than puffers and are especially good for nights.
I respectfully disagree with the above. Nebulisers have gone out of fashion because they are noisy, expensive, and have been shown to be no more effective than a puffer as long as the puffer is used correctly. This means using a spacer and learning the proper technique to give puffers. Your doctor or nurse can teach that to you.

A lot of problems with asthma come down to ineffective techniques when using puffers, which means that children don't receive their full dose of medication.

He has also been put onto ventolin- although the Dr called it a 'viral induced wheeze' as like someone else said, they generally won't diagnose asthma under 2.
This is the crux of the problem with diagnosing asthma under the age of 2. Under-2-year-olds have a high airway sensitivity to viral infection - this means they tend to have a much more signficant reaction in their airways than older children or adults. This, combined with their anatomically narrower airways, means that they will often have asthma symptoms associated with coughs and colds. "True" asthma - a hypersensitivity of the airways in response to infection or inflammtion - can only be diagnosed after the age of 2, when this viral-induced hypersensitivity starts to wear off in children, but remains present in children who have asthma. The difficult thing is that lots of children by this stage are already being treated with asthma medications, so the parents - and many health professionals - simply consider them "asthmatic". Asthma is what we call a spectrum disorder - it's something that most people have some degree of, but we only really need to treat in severe cases, and it can wax and wane throughout life. I was considered athmatic as a child, and even had a management plan with preventers, etc., but as an adult, I have never had an attack.

Anyway, consider adding the preventer, and if it any comfort, it may cease to be such a problem as your DS gets older.