Yeah, there's a huge difference between being able to read the words and to truly understand, and younger children, even the smarter ones, just aren't really capable of truly understanding without a lot of effort. And I don't know that decreasing his math skills would really bring more balance, because it's not like it's impossible to be good at both reading and math. Just make sure to keep both of them within reason for his age. That's really all that matters.
Theater makes a lot of sense as a hobby for him (and even though I still think it's probably a good idea to age him up anyway, there are programs that do theater for elementary school kids that aren't affiliated with the schools themselves). Maybe debate would also be a good idea, but I was thinking of some things that are a less intellectually-heavy sort of fun (and if you're worried about there not being theater clubs in elementary schools, there certainly aren't debate clubs). His life can't be entirely devoted to "smart" or "adult" things, after all.
I don't really have any specific suggestions, because he is your character, after all, and I don't want to tell you what to do with him.
Also, if you don't mind me asking, how old are you?