Ah, to be 16 again... NOT! Just thinking about it makes my stomach hurt!
My two cents: I would have died of mortification and secretly found a new job if my mom had ever decided to talk to my boss(es)!! A first job is nerve-wracking enough to try to present yourself as mature and responsible enough to have been a good hiring choice, having a parent jump in would, well, maybe work for other kids, but I would have died on the spot. I've had a wide range of jobs- everything from the typical babysitting gigs, to working on a fishing boat, to delivering mail, to my current job of pushing paper across a desk all day. While the fishing boat was a dumb move (for a lot of reasons, not just D-wise), in every job since I was 12 I made the decision of when and how much to tell, and because its MY health, and MY job, and ultimately MY neck on the line I think I do (and have always done) a pretty good job of weighing the pros and cons of what and who to tell. It also sounds like (from reading your responses to other comments) that while his numbers aren't always predictable or well-behaved, he's treating them as necessary, which is really the important part. I'd give him the benefit of the doubt, and leave it up to him to decide when/if to tell.
For what its worth, I think in every situation where I've had a "formal" statement prepared, something comes up earlier/differently that I prepared for and I get to instead have an easy natural, organic conversation disclosing my diabetes, so all the worry that went into my carefully prepared statements was all for naught. I think the last one was when I threw away a food wrapper, then dug it back out the trash to get the nutrition info off of it, which is apparently an unusual activity but a good conversation starter... "Oh, I'm digging in the trash because I need the carb count off this wrapper; any idea how many servings are in these M&Ms? No? Me neither but I'm diabetic and this is the only way I can dose my insulin even half-way right." Or "Sure, my pedometer says today I've walked 20 units. No, not miles, units, but that's because its not a pedometer its actually an insulin pump". Stuff like that.
As for the college application, I wouldn't check the "disability" box on the application, nor would I say anything at interviews (unless its part of the answer to a question- great challenges, etc). My personal stance is similar to yours, I'm NOT disabled, and I want to be seen and compared as a person, not a disability. I would also be devastated if I found out that I was only accepted somewhere because I was disabled/diseased/different. I would (and did) introduce myself to the health center on campus when I got to my chosen college, and told either roommates or neighbors and RAs at least the basic version in case of disaster, but that would all be long after acceptance.
And it might depend on the school, but I'd be amazed if checking the disability box actually garnered more financial aid. I work for public university currently, and the version they tell us is that like hiring employees, you can't discriminate admissions-wise on the basis of age, gender, race etc, and as far as aid goes, most is handed out based on income (FAFSA results). Scholarships are different, as long as you meet their qualifications (red head studying butterflies in order to create world peace) they can award to anyone who fits the criteria, but I doubt that unless there were a real tie that discolosing D would make a material difference. On that note though, you (or your son) can always call a school's Financial Aid office and see if they can give you an idea of wither there are any scholarships or additional aid for "disabled" folk, or even call the Office of Admissions and ask what they do with the demographic info and if it can hurt or help in any way to disclose up front.