I had my second child when my first was 22 months. His Nana (my mother) was visiting at the time, and although she didn't see us often, my son did have several days with her before the baby came, so he was familiar with her if not used to having her put him to bed. I agree with your first respondant that it's important that your son be left with someone he knows well or (if that's not possible at this point) someone he's at least seen a few times recently.
The main thing I wanted to respond to was your assumption that your son is too young to understand what's going on. I want to encourage you to try to explain it. I also assumed my son was too young, and I never made any attempt to tell him about the baby before the baby arrived. Part of my reasoning was that he wasn't even talking yet (he was a late talker and didn't really use words consistently until 2 1/2) and also that a friend told me she thought she'd only confused her (very verbal) daughter, who was 18 months when she had her second baby. She suspected that her daughter thought the word for tummy was "baby." So my son did not have any idea what was coming, and when he first saw his dad holding the new baby in the hospital, he shook his head and ran away. He then ignored the baby for a while when we got home, but he suddenly had trouble going to sleep at night (he'd always been a good sleeper), and we suspected it was because the last time he innocently went to sleep, he woke up to find his parents gone and then went to the hospital to find this new little person in his dad's arms (we left for the hospital in the middle of the night, so we unintentionally snuck out on him). Now I'm soon to deliver my third baby, and my second son is 22 months old. I've been explaining to him (and, of course, my now 3-1/2-year-old) about the baby for months. Much to my surprise, it's clear that he really understands there is a baby in my tummy. Of course, he can't completely understand what it will be like to have a new baby in the house, but I think he'll be much better prepared than his brother was. My second son is incredibly verbal, so this time we are able to have somewhat of a conversation with him and gage his understanding. It's making me realize that my older son would probably have been able to understand the same things if we had made an effort. So, although it's a little late in the game, maybe you could find a simple book showing a baby in a mommy's tummy (we used a book with our sons to explain the first time) and then occasionally ask your son whether he'd like to feel the baby kick. My younger son loves to put his hand on my tummy, although he's so impatient that I don't think he's ever actually felt the baby kick. I point to my tummy and say "Is there a baby in there?" and "Are you going to help mommy with the baby when it arrives?" Once he told me he wanted it to come out so he could see it (and started using his arm in a sawing motion to try to cut it out). We also point out other babies and pictures of babies to make sure we avoid the baby-tummy confusion (and it's clear we have). We also show him pictures of him and his brother when they were babies and tell him that one time he was in mommy's tummy.
So, I know that none of this can truly prepare him for how his life is going to change, but I think it's a start, and it gives me hope that the transition will be easier this time.
As for your idea of a pack and play in the hospital, do what you have to, but consider that the hardest part for your son is probably going to be adjusting to his new rival, not being away from you (not that being away from you might not be difficult). It seems likely that he'll be upset in the hospital, too, and then you'll have to deal with a difficult toddler as well as a new baby. I think you'd be better off giving yourself and your new baby a little space to breathe before coming home to the challenges of two children (because, wonderful as they are, they will be challenging).
Good luck!