If he is happy for the most part and being challenged in his extracurricular activities (he is turning out to be very musically talented) is it fine to let him coast through elementary school?
The answer to this is, probably not. First, do you know his level of giftedness? I did feel the same way as you - to allow my son to coast through elementary school - for the first year. In K, my son learned very little academically but he was having a ball and it wasn't SO academic that it bothered him. Once he hit first grade, it started to bother him that he was learning nothing. What I also noticed is that he was sitting in school all day, tuning out, handing in worksheets within 30 seconds of them being handed out and not growing at all. Very quickly, my son became perfectionistic (as he was used to doing everything perfectly in 30 seconds or less), he developed zero work ethic, and began "dumbing down". These are all terrible things to have develop and continue throughout any period of time in school.