Oh, Lori, my heart goes out to both of you. Not at all what you expected when making that appointment, I'm sure.
I hope that the pediatrician will be sending him to someplace that specializes in pediatrics. Hopefully there will be physical therapists or orthotists who are knowledgable about and sympathetic to the sensory issues. I would imagine that there are other kids who have dealt with the same issues. I've personally worked with adults who have sensitive skin and/or senosry issues and don't tolerate things like carpal tunnel braces or other hand/wrist braces. I did have one little guy who had surgery done on both legs for tendon lengthening and needed casts on both legs simultaneously. We were sure he wouldn't tolerate the casts due to sensory issues, but he did amazingly well with it. Perhaps it won't be as bad as your son pictures it. But I certainly understand the anxiety about it.
I hope that the process goes smoothly and with as little disruption to the rest of life as possible.
As far as the OT being covered by your insurance, I wonder if you could find an OT who would advocate for your son. There typically does need to be a medical diagnosis but then most OTs will use billing codes that are accepted by insurance versus those that aren't. Unless there is just no way to make the treatment medically necessary....sometimes the needs just come across as too educationally oriented and then don't get covered.
Maybe this new medical diagnosis could work in his favor and help to get OT and PT?