I think you're amazing, you're being supportive and kind when its a really difficult time. Its really lovely to read someone being so selfless and without sounding patronising (as I really dont mean to sound that) but I think you should be so proud of yourself.

I also think its justified and understandable that you're wobbling over this. Its such a lot to come to terms with. I can't say if you should stay with your fiance or go, only you can decide that, but if you stay it would be so good on so many levels - being with the man you love, warts and all, and being a decent role model for this poor 5 year old kid who's just lost the father he knew. I would also think your marriage would be so strong, getting through this, and be able to withstand anything life throws at you in the future.
I know its different to the norm, finding out that your fiance has another child, but families are so mixed these days, with divorces and all and these people make it work. Having your own child should not change anything, trying to look on the bright side for you, think of it as your own child having a big half brother to look out for him/her! I bet with lots of talking, love and time, you guys will have a healthy, lovely family unit - just an extended one.

I wish you all the best in this hard time.