I started playing with a teacher at 9-10, but when I
started becoming interested for the guitar, I was about
the same age as your boy is now.
I also had the guitar in my lap, it felt better.
If he chooses to continue playing he will find out that
when he starts to learn som stuff, its easier to hold
it against his body, so thats nothing to worry about.
My brother did it too, and he was 14 when he started!
He does have to learn how to press the strings first.
If you start playing when youre a bit older, that isnt
as much of a problem as it is for younger people, since
their fingers are'nt as developed.
It's hard to press the strings with small fingers, and it can hurt.
I would suggest that when he wants to hold the guitar
against him, use the textbook way first:
place the guitar on the left knee, not the right,
use something that elevates his left leg (I dont know
what its called in english) and sort of tilt the guitar
so the head is pointing somewhat upwards.
That makes acoustic guitarplaying alot easier for
everybody, but especially for kids that have small arms and fingers.