Eleanor, I also would not worry about the wii games. I see LOTS of kids making up mario games on the playground, and I, personally, was excited when my son joined in because he knew a character! Our school library also has sections based on grade level and I agree it is ridiculous. I just got in the habit of going to the public library and letting my son roam free to pick his own. He also would come home from kindergarten with simple books, and read them in a minute, but then have others available to read if he wanted. I also was a little worried when he seemed to choose to read dumbed down baby books, but I think they are like candy or something at times. I would not doubt your son's ability, just keep giving him stuff at home. My son (now 1st grade) just read my copy of The Hobbit and was so proud to get 16 AR points for it on the comprehension test at school. (The "baby books" are 0.5 points....) So THERE school librarian!
About skipping, I would do it if I were you...don't let the things you mentioned stop you. My son STILL asks me why I "made" him go to kindergarten. Nan