MY kid also plays 12u, so I may have a slightly different take on all this. My biggest question for you is "Is there an in between?"
Correct me if I am wrong, little league in my town means you practice 1-2 times a week, you have maybe 1-2 games a week. Fall season lasts about 8 weeks, Spring about 12 weeks, and All-stars gives you another 5 weeks? Totaling 25 weeks a year, with plenty of time for basketball, or football, or any other passion the kid may have.
To go from LL to the type of team you are talking about is a HUGE change! Most likely you will practice 4-5 days a week ALL YEAR LONG, with 3 home workouts expected to be documented per week with very little break. Our coach is graciously cutting out 1 out of 4 practices next week due to finals, and giving us off 12/21 - 1/7 for the holidays, that likely has more to do with kids not being in town than him being nice though! Even in the winter, we may not be picking up a baseball, but there are speed and agility practices, specialty practices for pitchers and catchers, team hitting...etc.
Are you ready for that? Don't you think moving to a local travel team that practices all year round but not as fierce may be the step up he needs to decide if this is what he really wants? I understand about getting out of the LL program to see what kind of baseball talent he really has and if it can truly go anywhere, but you seem to want to go from riding a bicycle in a park to driving a Porsche on the Autobahn! I'm afraid the time and training commitment will put him and you parents off of the baseball idea if you don't ease into this. But I do agree that if the boy has talent it's time to move on from LL.