You just described me!

DD does the 2-3 20-40 minute naps during the day, goes to bed at 8-9pm and wakes around 7am. She is also prone to the 2am party. I usually bring her to bed with me after the first wake up, then feed her back to sleep for the rest (usually 3-4 wake ups per night). If she is in party mode, I put her in bed with us but ignore her. She happily wriggles and squirms and eventually falls asleep. I am hesitant to get up with her because I don't want her to think that it is alright to get up in the night time.

DS is the same age as your older child and he gave up his day nap a few months ago.

I have heard a lot of babies start sleeping better around the 8-9 month mark, I live in hope...