All of the above. He is reading books (voluntarily) that are listed around a late 5th-early 6th level. They do comprehension testing at his school, and it's rated around that same level. I don't trust AR tests, although he does well on them, because their ratings for books always seem a bit higher than they should be. (When everyone else says a book should be fifth grade, they seem to put it around a 6 or so). And since AR is optional at his school, I told him that if he preferred, he could read whatever books he wanted and write me a detailed summary - which he did. So he seems to be comprehending pretty well.

I tend to zone out as well - and was halfway through grad school before I managed to train myself to pay attention even when I didn't want to. I did have a professor suggest once that I may have mild ADHD, but I never got tested, because I didn't want to be medicated and between full time school and full time work, I had no time for therapy. So I suppose ADHD is a possibility, although the way he can spend hours focusing on his latest lego or erector set masterpiece makes me skeptical about that. I think he's just really easily bored. When he brings home papers from school on a new topic that he hasn't covered yet, his grades are fantastic. But they begin to slip after a few days of the same tedious work. Always because of careless mistakes.
As far as whether he's getting a challenge, I think his teacher is doing everything in her power. She gives him more challenging spelling and vocabulary words, more diffucult math homework, and has told me that she has higher expectations for his writing than she does for most of the class. So he's getting a bit of a challenge, but not as much as I think he should have. I'm less worried about this year as I am about the future. His teacher right now is trying her best, and doing a moderately good job. But he has had teachers in the past whose idea of challenging him was allowing him to run errands around the school or help other kids who were struggling. I have told every teacher he has had since preschool that I'm happy as long as he is learning something new, and not just sitting in a chair and stagnating for seven hours a day.