[cart man]

As far as question 3, no he can participate in high schools sports if he is repeating a grade regardless if he played or not in the first year in that grade.
Now, if he is not considered repeating 8th grade if moves back to 7th then he can. I would put him back in 7th grade now while it is early. If he has already played high school sports this year then I would say going back to 7th is not an option because he would be in 2nd year in that grade and participated in high school sport he would lose a year of high school eligibility.