I have decided to fix up the "crapbike" so I can start commuting again. (yea i know she needs a new name-but she wont get one till she's fixed) Here is the problem. I have to take my 7 yo. son to school and then I pick him up at the boys and girls club after I get off. I want to be able to do this together but there is a hill that I have conqured, but would totally kick my son's butt and he would be ready for bed before school even started. I know I need to take him out and see how far he can go, cause I know he will eventually be able to do it (and probably sooner than I'm giving him credit for) but here are some questions.

Should I get him smoother tires?
Does he need gears?
Does this mean a new bike for him? (I'm already saving for a new road bike for me)

I just really think that this would be so good for both of us but I am worried about the $ issue and him possibly needing a diff. bike. (I'm scrounging yardsales and craigs list)
Any hints or thoughts would be appreciated!!