Generally speaking, the best way to improve intonation is to practice scales, everyday. If your teacher is using pure Suzuki method, it is time to switch to a teacher who combines both tranditional and Suzuki method for teaching.
Each violin has its own sound quality, unless the violin can't be tuned correctly, otherwise, change violin will not improve intonation. In your case, your son's violin does not sound that terribly, you can change to a better one when he needs to have a bigger violin.
He holds his violin high, that is very good. He moves bow smoothly, that is good too.
His left waist bends too much, you need to remind him everytine until he corrects it.There are lots of videos in youtune which can help him establish correct left hand position. His rhythm is a little bit too messy, he needs to play with a metronome every day whenever he is playing.
My son played the same piece when he was 5.
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