I agree. Seeing her child challenged with emotional issues like this are tough as there is no band aid to cover the pain.  First, having him in structured group activities which you are doing is right on. Kids and people in general love hanging around confident people so in a sense it is a vicious cycle, but he can get on the upside of this.  
Do role playing with him and model how he might respond or invite himself in.
Role reversal is helpful as well where he actually plays out the role of others.  
This is more tangible than just talking about it and is more effective.  
I will tell you what else will help....I promise!!!   I have developed a character building program for children and it has an inspiring story but even more, it has a CD with guided imagery exercises with one of them being to be more like Gustav the Goat who is confident and courageous.  The messages go into a deeper level or the wise mind.   It is powerful and have used it with clients for decades.  
Go to www.wingsforwishes.com.  We are switching online store servers so if you can't order it online just call or email me and will get it to you.  It also plants seeds of greatness etc and facilitates healthy life choices.  It will make a difference.  
Let me know how it goes.
Edie