I realize I'm a bit late to this thread, but I was in a similar predicament. My son was turning 10 and wanted a new bike. While he was a bit small for the Trek 820, there was no doubt that he would quickly outgrow a 24 inch bike. In addition to that, he insisted that his new bike cannot have grip shifters - due to a bad experience with a Walmart bike. After some long research & discussion with my LBS owner, we decided to go with the 820 in the 13 inch frame. He loves it. I have taken him out on some easier trails and he really enjoys the bike. He does occasionally have to get off and push it up some rocky hills. There is no doubt that he will be able to overcome this once he grows a bit and gets a bit stronger. In addition to that, this bike has become his primary transportation. He is on this bike from dawn to dusk. I believe the stock tires on his 820 are a good mix of trail & pavement. Overall, it was a very worthy investment and I am thinking I probably should have stepped up to the Marlin 4.
Typically, his saddle is lower than this. In this photo, he was getting tired so we left the single track & hit the paved road to get back to the trailhead. I raised the seat for him because there was a 1/3 mile section of a 4-5 degree climb on this section of road. This was our break when we were almost at the top.