K.
You can't keep your son "safe" from everyone that is going to hurt his feelings. You have to teach him how to stand up for himself, this is not a battle you can fight for him but you can give him the self confidence and tools he needs to fight it himself. Kids forgive and forget quickly because to them its not that big of a deal. When parents try to get involved it usually becomes a huge problem between the families and the kids get hurt even more b/c they can't play together and they don't even know why!
Teach him to say things like, "I don't want to play with you when you call me names." or "I don't like it when you call me names! Please say that you're sorry"
Kids will be kids, there will always be name calling it is your job to teach you child how to handle it. I went through something similar with our neighbors. Their daughter is 2 years older than my daughter and has older brothers, so she knew lots of things to say to upset my daughter but I practiced with and coached my daughter. She stood up for her self and now they are inseparable best friends. In a time where many neighbors don't even know each other, it would be a shame for you son to lose such a close friend.