For damage that light I'd take Oxpho Blue and steel wool to it. With a few coats it'll look blue and it'll get rid of the rust and not look so obviously "repaired". I redid the receiver on an old Browning shotgun and it looked pretty decent. That gun had a fair amount of original bluing on it which is still there. It won't give you a completely refinished look or totally hide the rusted area but it'll restore the area somewhat while still showing the holster wear. Oxpho Blue is good stuff and has its own "quality" that's different from most other cold blue solutions.
It all depends on what you hand to your son when that day comes. I'd personally keep the "character" on it for him vs. refinishing which will erase it. Either way is OK, it's all in what you want it to represent.