Excellent question! I can understand where folks are coming from when they caution against giving too much feedback on the mistakes, but as an English teacher, I also know how important it is to help kids improve their writing. A great plot and great ideas only go so far if they're overshadowed by glaring errors - especially if those errors make the writing indecipherable in certain places.
That said, I'd echo a few things folks have already mentioned. Focus most on positive, specific feedback: I love the way you keep me guessing until the end! or The description of this character/scene is so detailed, I can imagine it perfectly! I'd also echo the sentiment from @Galastel - even if the plot isn't to your liking, I'd only offer constructive feedback on that if there's something that genuinely doesn't make sense.
When it comes to feedback on the actual writing mistakes, my biggest suggestion would be to offer limited feedback, and then more as desired. He'll run into natural obstacles if there are a lot of errors - friends won't get/like the story, teachers will offer feedback, etc. Encouraging and praising the writing in general is probably the healthiest thing you can do to keep him inspired. And I'll definitely echo those who have suggested encouraging reading! I came to be a passable writer simply because I read A LOT.
The other thing to realize is that (at least where I live) kids learn various writing skills in a sort of continuum that progresses from grade to grade, so certain skills, grammatical concepts, sentence complexities, etc. may just be something to work toward. Personally, if you want to give a little constructive feedback, I'd just tackle the issues you feel are the most problematic and/or the ones that impact readability the most. I try to explain from the viewpoint of a reader who really wants to fully enjoy the story - targeting issues that interfere with that: "Wow, this section is SO exciting! I was a little confused here because all of these different sentences run together, but I think I got it... do you think we could figure out how to split them up a little?"
So cool that your kiddo is already writing, and so cool that you're trying to do your best to encourage that! There's no right answer, but hopefully, the variety of great feedback you've received will help a little. :)