It seems to have become fashionable as of late, so why not.
Yes. Territus erat sounds better to me, at first sight (and you used it later in the sentence), but with territus used as more of an adjective. To be honest, though, I don't know how common that is. Maybe we should rather use something like pavebat, but then we'd lose the repetition of the same word "terrified" that's in the original.Eta - so terrebatur, etc.
But then that makes it sound like a process, no? I wanted territus erat but that'd make it pluperfect, I thought.