WOW!
Thanks for all the responses, especially from the professional instructors on the list. With the help of the list, I now have not only have some better information, I also have a clearer sense of how to discuss the rules of the range. Just as an FYI, my son is a BIG BOY. You'd look at him and think he's 11 years old, and he's been shooting with me (mostly air guns and bb guns) since he was 6, it's only recently we've moved to real firearms. It's easy to forget he's 8 years old, and 8 year old boys desperately want to be "big boys" so it can be hard as a Dad to lay down zero-compromise rules.
When we use the range, I do the same firearm safety speech (treat all guns as loaded weapons, muzzle direction, etc.) I always do, but it's all about what he experiences, not what he hears.
In response to all the great input (and with due respect to my wife, with whom I tend to agree most of the time), we're going to use a star system from now on - but I've re-jiggered the list so that there's more "class three" and "class one" penalties but not so many class two issues.
Basically, I want to balance the acquisition of accurate, single-shot kill shooting skills (which only comes with firing a LOT of rounds at targets under a LOT of different conditions) with the need to use those skills safely.
Desire precedes ability, ability precedes mastery. There's no other order or learning for any skill you'll seek to have, and it's the transition from ability to mastery that often requires a lifetime of practice, and may never be attained. As a result, I want to make the time on the range both safe and effective. I know that in the fire service I have made any number of unsafe actions in training, in live-burn situations, one of which landed me in the hospital, but I was never banned from training after making a mistake, even a dangerous mistake.
So, I think that this compromise is actually better than the "all or nothing" range safety system I had previously implemented, and it will allow for more shooting practice and better communications.