Thats so sad!! I feel so awful for "J" he sounds so neglected. You dont know anything about their family? Should discreetly ask some people you know and see what they say and go from there. And if things are really bad, then I might consider calling CPS. That boy is young and needs a proper family. If they cant take care of him then someone needs to. So sad. I also really hope that he isnt being beaten. His SD sounds really mean, and it sounds like "J" is scared of him. That is a red flag. I would check into things first and then talk about CPS.
You gave your son good advice though. You are being a concerned parent, and from what it looks like "J" doesnt have a good home life and you dont want your son being exposed to it in their home. You arent saying that he cant play with "J" you are just saying not at his house.
You are just being cautious, as you should. But yes, do check into things and see whats really going on.
And update us too!