First, congratulations to your son on receiving this offer.
To answer your questions:
Is 35% a good offer? If the school awards the maximum-allowed 11.7 scholarships evenly among the maximum number of 27 players, each player would receive about 42%. A 35% offer is more than the 25% minimum some players probably receive, but less than the 50+% given to the highest rated pitching recruits. Baseball scholarships are usually distributed in such a way that the median is considerably below the average, so it is possible that 35% is at or above the median at your son's school.
How do you know how much will awarded from merit and financial aid? The school should have a process for giving a reasonably accurate estimate of merit money before the NLI signing date. Schools are not allowed to combine need-based aid with athletic scholarship money, so this won't be a factor unless your son is likely to get more than 35% in need-based money.
What happens if the financial package arrives after your son signs his NLI and is not adequate? If the difference prevents him from attending this school, then your son would not be allowed play sports at any another NCAA school his freshman year. If the merit money is needed to seal the deal, your son should not sign the NLI until you are confident that the rest of the money will be forthcoming.
What should you do? If the 35% by itself does not bring costs down to a level you can afford, you should have a frank discussion with the recruiting coach. He needs to know if your son is not presently ready to sign during the early signing period. Tell him how much your son wants to attend the school, tell him how big of a gap you still need covered, explain what you have done to apply for merit money, and ask if there is anything he can do to expedite the school's merit decision or increase the athletic offer. If the deal isn't going to come together, it is best for all parties to figure that out as early as possible.
Best wishes,