There are several answers to this.
The first is that there is no hard and fast rule about the speed at which a kid should move up. It is not at all unusual to repeat a level, and it's not anything you should automatically be worried about.
The second is that under normal circumstances, if a kid is good enough to make it to regionals, coaches should generally be able to get them prepared for the next level by next season, in my opinion. HOWEVER this is not a hard and fast rule either, and there are a number of completely valid reasons the coach might have for keeping your son at 5 for another year.
The third is that your kid is very young, and I, despite being generally pretty gung-ho about pushing my kids forward, would be hesitant to have somebody as young as 7 compete level 6, even if he may have the skills for it. I know there are age requirements at each level, but I don't know off the top of my head what they are.
My advice would be to ask the coach. He could have any number of reasons for keeping your kid at 5 for another year. Being more familiar with your kid than any of us are, he will be able to answer your questions far better than we can.