Very Timid Dog

I got a Cavalier King Charles Spaniel at age 14 months.  I've now had him 5 months.  He is extremely timid.  When walking on leash outside, he is walks 10 steps and then stops to look.  Every little noise seems to bug him.  He cowers at the sight of other people with their dogs and doesn't want to meet friendly dogs his own size or smaller on their leashes.  When he hears people talking, children playing, cars engines cranking, airplanes flying overhead, dogs barking in the far distance, or even blue jays calling, he stops and stands like a statue with one front paw lifted until he feels safe.  If there are too many noises, he refuses to go potty.  I thought at first it was just the new home but he's had plenty of time to adjust now.  Even in the house, he will not greet visitors and hides behind me.  He won't take a treat offered by a stranger in my presence.

I'm thinking he was not properly socialized when young, not exposed to other dogs, people, and places.  Talked with the breeder about it and she indicates that he got along well with his littermates.  One of his brothers is also very timid and has become a "one person dog"--Ignores all family members except the father.  I doubt this is genetic and more likely poor socialization at critical stage in their lives.

Any ideas how I can get Carson to be less fearful and more social.  I was thinking about taking him to an AKC-accredited obedience class.  Or might that just be too traumatic for him?