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What should and shouldn't I have in a fluffy Son's of Horus or Luna Wolves army? Other than Despoiler Squads and Legion Terminators which I've heard are the Warmasters favourites.

Thanks!

Well some form of the Reaver Squads helps. The LW/SoH were all about going for the throat so they used jump troops terminators and pods.

Doing Luna Wolves myself and I must say nothing really seems unfluffy for them. They were decently balanced just tended to be a bit more front loaded.

Anything and everything. To quote Betrayal: "Company strengths as small as 36 and as large as 972 were recorded by datafactors during the Legion's action against the Dasim Patrimony. The configuration of squad types within a Company varied as widely as it's strength."

LW/SoH more than any other legion are the one with no overall Legion theme.

As said, Sons of Horus can get away with any style of army and have it fluffy. The same argument can be made for any Legion but the Sons, more than any, can be shaped into anything.
If you wanted less 'fluffy' and more 'stereotype':

- Tactical Squads, especially ones carrying blades. The Legion is noted to be at least 50% Tacticals by numbers, which is a pretty massive statement to make. They are particular noted as inventing the 'Despoiler' and sending them in as melee shock-troops in addition to holding ground and being a Legion backbone.

- Aggressive deployment using transports, outflanks or Drop Pods. While they could play any game, they loved their 'speartip' style to win a fight quickly. Love your bikes, tanks, aircraft, jetbikes and recon elements. Basically anything that can cheat the deployment zone.

- Expensive toys. Horus was the favourite son and had all the best picks of equipment, meaning his Legion was inevitably carrying the best kit. Apply artificer and Terminator armour liberally, get your Power Swords dusted off, and your tanks can probably splash out for a pintle gun.

Generally speaking the Rites of War are good ways to see how a Legion is 'supposed' to fight. In this case we have the extremely aggressive Black Reaving encirclement, and the faster, flashier Long March. Similarly the Reaver Attack Squads are what I would consider as the iconic Sons unit to have with their offensive output, love of Drop Pods or Jump Packs, and long lists of wargear options.
The only really fluff point worth sticking is that if you wanted to play the absolute cream of the Legion, you want them in black & red rather than the usual green. Justaerin Terminators and Catulan Reavers made up the First Company under Abaddon and are beautiful distractions if you ever get bored of painting the usual.