R.J.
They make pads to go inside the helmets to keep them snug. For kids' skate helmets there are usually 2 sizes... thin ones and thick ones that go front, back, and top (to extend the life of the helmet so they can be worn as your head grows). If the thick pads are already in, then yes, it's too big. If it's moving fwd and back and INCH, it will only protect his head from projectiles, not from impact. Impact will cause a concussion from his head bouncing off the helmet. In order for it to absorb the impact, the head needs to be stationary in it.
The triangles go *around* the ears. Should NOT be just under (unless you want an ear crunched or lopped off).
It sounds to me... if you have to tighten the straps that small, and the helmet moving that you need to move down a size. But I would personally take him into the shop with you and have them fit it. It may be a really easy fix of just something done weird... or it may be the wrong size.