My 3 yr old son got stung by a bee a few days ago and now is terrified to go in our backyard. he's also having nightmares about 'bugs' in general.

Be patient!: Many ways to address this. Respect his fear and don't belittle it. Let him know he is going to be ok, you are here to protect him, and dont push him to go out initially. However, don't let it last too long and slowly start to desensitize him by maybe taking him out holding him in your arm, wearing protective gear and so on. Time will heal these fears and he will eventually get over it.