My experience/situation...I currently have 2 males/2 females in a cockatiel cage...I actually had 6 keets in this cage prior.
THEY have chosen their mates by themselves, which is ironic "nature-wise"...because I haven't chosen to let them "try" to reproduce; (not setting up a nesting box). If they do breed, lay eggs; I will go from there. Just not encouraging them. Please don't ream me.
But I have observed them both during the day, as well as have heard them at night while I've been in bed, screaming, flapping wings, etc. I used to clip their wings, but decided to stop and after their feathers grew back, I let them fly freely when I'm able to monitor them (since I have dogs & have to be safe).
If I don't let them out to fly a couple of times a week, they get "cage fever" & try to fly insanely in the cage, squawking & carrying on, loose feathers, etc ...similar to night terrors. I've had my babies a few years now, so they "know" each other. But just like humans, (to a degree), they have nightmares, pecking orders, etc. I deduce that if one or more of them try to sleep in a different spot/perch other then "their" normal "nite, nite" spot, like an alpha dog; then they will fight/fuss.
When I get ready for bed, I get their somewhat thin FLANNEL blanket and say to them, "FIND YOUR BED"...which gives them time to find "their" spot/perch. I cover them. Done.
If I hear the flapping wings/squawking in the middle of the night....I let them work it out, let nature be. Mind you, I wasn't always like that... when I first started taking care of budgies, I was like a new mom and jumped out of the bed every time I heard a strange sound. I didn't get a lot of sleep just like with a newborn. But the animal nature world is a little bit different than the human world. Yes, we have to be on top of everything with a newborn baby, but I believe that nature will take its course in the animal kingdom. I had gotten so stressed and overwhelmed with the birds that I had to turn it over God and let his infinite wisdom and the way He created nature to be and NOT try to control them. For me, the saying, let God do His thing, helped a lot. As much as I love animals and nature, I cannot be there every second of the day. BUT, I also believe that if you see an issue or a problem; YES, definitely intervene and try to take care of the problem because we have domesticated them. They rely/depend on us. But I did not want them to be stressed out or myself, so that is when I just let nature take it's course. In the beginning I would separate a couple of them many times to another cage and keep them next to each other so that they in their own way could work things out. When I get up in the morning and take the blanket off of their cage and greet them and tell them good morning, I turn the radio on which is set to a classical music station; I think that they really dig that. Because it is calming and soothing yet when there are songs that are revved up, it can excite them but in a positive way.
So, as a "somewhat" veteran, budgie mom, (comes with life experience), I CANNOT, nor should ANYONE else... tell you how to raise your baby/babies, because they are all different in their own ways and with their own personalities. Because I have just given you my two cents worth and you have to do what is right for them FIRST, and then for you because you are the parent & YOU adopted/rescued them (petstore, etc.).
I just want to try to ease your mind on the night terrors. Talking to them, being consistent every night at bedtime, finding a cozy blanket to cover the cage, and maybe temporarily finding them a soothing, jazz/"elevator"/ classical music station (low vol at night), might help.
And one last thing before I need to shut up...lol...
If it is possible and you can put the cage near you in the bedroom.... I would just suggest that you could at least calm the nerves of them and say, "mama or daddy is here"....shhhh..."it's ok". And you might have to say that several times a night just to reassure the baby until he or she is comfortable sleeping in another room.
I probably will get slammed by a lot of people on what I have said and that's okay but I stick to my guns and I do what is best for my babies and it is just about personalities and situations and you just have to do the right thing for your babies and you.
I wish you luck and hope to get updates from you.