First of all, I understand about being busy and sleep deprived (I have an 18 month old and a 10 week old) but you need to find the time to read Healthy Sleep Habits, Happy Child. It has sections by age, so you do not have to read the entire book. You can find time to read for 5 minutes a day at least. I say this because there is so much good information in the book. I will outline some of it, but the book is so helpful, I've read it at least 4 times now! (and just so you know that it works, my son went from never sleeping more than 2 hours at a time to sleeping for 12 hours straight at night after just 2 days of work!)
First of all, you probably need to address your daytime napping as well as your evenings. Your baby needs to be rested during the day in order to easily fall asleep at night... best phrase from the book: Sleep begets sleep. Your baby needs to be soothed to sleep within 1-2 hours of waking. So if your baby wakes at 7 in the morning, you should make sure they are back asleep by 9 (that means start soothing by 8:45). If they wake up from that nap at 10:00 then their next nap should start at about 12:00 and so on. They should sleep for at least an hour at a time to be good sleep. Bedtime should be between 6:00-8:00 pm. Keeping them up later does not mean they fall asleep better or stay asleep longer.
As far as the cio method, it depends on the child how you handle it. For some children, coming back in every 5-10-15 minutes will work, but for others (like my son) I could never go in to check or it made things worse. The book says that in this case, you let them cry it out for as long as it takes. The longest I think he cried for was 2 hours, that only happened once. No, it does not emotionally scar them, but it does teach them to self soothe and that bedtime is for sleep and nothing else. Since I have started this with my son, he has slept through the night 12-13 hours everynight and I have only gone in his room 3 times... twice for tornado warnings (to take cover) and once because he had a fever and I wanted to take his temperature. He is very happy and well rested now and never fights sleep unless we have messed his schedule up and put him down too late or we skipped his nap.
As for the swaddling, I was in the same boat with that as well. I thought I had to swaddle him to keep him asleep, and when he started rolling, I was sure he would suffocate. As it turns out, he only needed the swaddle because he was overtired. As soon as we corrected the naptimes and bedtimes, he no longer needed the swaddle.
One more thought. Everyone needs different things in order to sleep well. Some people like it dark, others like it dim. Some like it quiet, others like background noise. My son MUST sleep in the pitch black (we have room darkening shades) and with white noise (a giant air filter). If he doesn't have these things, he either doesn't sleep or doesn't sleep well. Maybe you need to change something about the nursery to make it easier to sleep in.
This is only the basic information you would get from the book, there is so much more, please find the time to read it! I just started rereading part of it again now that my baby is getting to the age to start scheduling naps. It is so worth it!
If you have any questions, feel free to email me. Good luck!
A.