It sounds like he is probably over-stimulated by all the other kids and if he is an only child and there are that many other kids he is probably having a hard time sharing/playing with others if he's used to playing by himself or even needs his own quiet/self time. This can be a hard transistion for a kid and at this age they naturally have a hard time sharing anyway.
Also, with this many kids he probably isn't getting the attention that he wants or needs and hence is acting out to get that attention. Which is a pretty common behavior for kids.
I would talk to your husband about what to do but if it were me I'd probably look for some other daycare options. Ones that aren't so crowded or that have more structure (sort of like a preschool), a place that is helping learn the proper words or behavior to use when he wants a toy that someone else has or when someone else takes a toy from him. A place that isn't just reprimanding him for hitting but helping him to know what he should have done instead of hitting (ie getting the teacher if someone hit him first, asking to play/share a toy with another child, respecting that child if they say "no", and in turn the other child respecting him if he says "no" to sharing). If their are so many kids that the teachers aren't able to supervise and witness the conflict to tell you exactly what happened/why the hitting occured, then I'd definitely be looking for another place for him to go.
I have two kids and my sister has 5, and so I know that different parents have different concerns about hitting. For example, my sister's son got bit by another kid at our church's nursery which is for kids 18 mo - 3 years old on Sundays. Well, the teachers saw who bit him and told both parents about the incident. Again, they were between 2-3 and my nephew started playing with a toy that this little girl had been playing with, but apparently she wasn't done because she came and bit him so hard on the arm that it bruised. When my sister tried to talk to her friend about it (the mother of the little girl), her response was very carefree, like it was no big deal, because this little girl has older brothers and that is how she defends herself against her older brothers at home so they let her do it. Needless to say we were both shocked because instead of teaching this little girl how to respond to conflict appropriately they are teaching her that it is ok to bite or hit someone if they upset you. And my belief is, if you don't teach them while they are young then when do you teach them? If you teach them the right way to do things first then you don't have to re-teach them later.
Good Luck! I'm sure your son isn't aggressive, he's just overstimulated by his environment and hence trying to "fight back" the chaos.