Poor wee man, he has obviously had a bad scare or two down the road.
I actually agree with your trainer. Just because he is a cob doesn't mean to say that he can't be trained well. OK, so his conformation may limit him, but I know several cobs which are competeing medium and higher at affiliated dressage. If you only want to hack, well fair enough, but schooling will help to make him a better and safer hack.
I would probably take him right back to basics, getting him to accept a saddle being lunged and long reined, before leaning over and putting weight on his back. You must do this with a confident, competant person on the ground. If you don't feel you have the confidence to do this, then get a confident person to do it, and once he is OK with someone being up you should be Ok just to mount and sit there - and don't let anyone tell you it's wrong to get up, sit there a couple of minutes and get off again.
There are plenty of things to do on the ground while you build your confidence in the saddle again (believe me, I am the queen of nervous nellies!)
Lunging endlessly in circles is boring, and it puts strain on the joints. Vary it by increasing and decreasing the size of the circle. Walk some straight lines. Use poles on the ground, use them in a fan shape to lengthen and shorten the stride. Practice changing speed within the gait. Get his voice commands down, and you can transfer them to riding.
My boy is a bit of a speed demon, but instead of using a lot of rein I always ask with my voice (as well as seat) and it is much better than pulling on his mouth all the time. You try telling my boy that he is "only a cob" he does a bit of everything: dressage, jumping, cross country, horseball, pony games, is a fantastic hack and can out-walk every horse at the yard. But until he was 11 all he had ever done was hack, everything else he started after I bought him. He is now coming up 16 and is showing no signs of slowing down (both literally and figuratively!)