Hi everyone... I'm the OP on this thread. 9 months later I thought I'd give an update.

I think not grade accelerating was the right choice. The math
acceleration has addressed the most glaring need, and the G&T teacher actually spends an hour with DS7 every day (half of that 1 on 1!) working on language arts. He seems to like the specials too.

The 'gifted cluster' has been a total bust, DS learns very little
while he is with his regular class. Fortunately this adds up to only about 1/3 of the school day.

DS7 says that he likes being with kids his own age and does not want to skip 3rd grade next year.

In short, not skipping has worked out because the school is allowing DS to be a 'closet 4th grader' while also spending time with age peers. It's not perfect, and who knows how long it will last. Still, we are lucky that the school has been so flexible.

Ul.H.