I'm very sorry to hear about the accident. I recently had a coworker pass away suddenly (freak car accident on the way to work), and it can be difficult to go on acting like things are "normal" after that. I hope you find any support you need, and that he does recover.

On the subject of fear, I personally got over it several years ago when I started motorcycling. I had taken the MSF course 6 months previously, hadn't ridden at all after that, then went to pick up my new bike and rode it home in the dark. It was one of the most nerve-wracking and exhilarating things I've ever done, but I sucked it up and got through it. After that everything seemed mild in comparison. I haven't been riding bicycles for long, but I ride on 40mph+ busy streets with the same acceptance. It's all about making reasonable concessions for safety; extra gear, hyper-awareness, always assuming that no one sees you while doing what you can to make sure they do. But don't let it compromise your fun - life is short, regardless of when you go, so you might as well enjoy the moments you have. That's why I ride (with and without the motor).