You tell him "sometimes grown ups have to pay full price, and kids don't. It's part of being a grown up"
I mean, I'm being a little bit jokey, but if you've got a fan that is mad that they paid to come to a game and a child got in free, that's a genuinely awful person, and not the kind of fan I would want.
As far as when do you decide a seat is unsold? It's a great question. I'd need to see some sort of distribution of when tickets are sold. I would want some critical mass, where if you get a late push, you have some tickets left. Maybe withhold 1000 for last minute walkups? I'd need better access to the data to make that decision, but it doesn't seem like a particularly complicated question. You decide what your acceptable risk of paying customers being seatless is, and you do the math.