Two things here - foster carer and birth family - I would deal with differently. But with both I think you need to do some reading up on the issues and take the lead, and push through what you think needs to happen, not wait for the SW nor be led by them. I have had to write this quickly so hope it makes sense. My experience is at the end of this long post (sorry it is so long!)
In your shoes I would tell him the truth about the foster carer, give her reasons, say you don't agree with them (presumably you don't) and support him with the grief and loss - in my experience this is the only effective way to deal with loss and hurt for a child - to be clear about the loss, put it in context for them, explain all the relevant issues, explain that you cannot remove the hurt but you can make it better for them, and then support them with their feelings. I don't think you could talk about it too much, tbh - raise it a lot and keep talking about it.
At the same time in relation to the birth family say that you don't know what is happening but there are delays and you will do your very best to sort it out as quickly as possible and you will keep him informed and keep talking about it. Obviously don't make promises you cannot keep but once you look into the research you will feel more informed and it will be easier to work out what to do and explain that to him.
In relation to direct contact with bio mother, as well as bio siblings, if this is what he wants I would have a good look at the research which supports it and then push it through with the SW. Considering more direct or f2f contact has been the recommendation for decades incidentally, it is not a new fad - obviously not suitable for every family but far more than it happens in the UK - it is the norm in some countries. Fundamentally the research does not indicate that it will make it harder to bond with you, that is entirely down to you and how you build the relationship. How well the contact goes and its benefit also is down to you and how you manage it, in the absence of a suitable professional helping you (which is unlikely to happen in the UK)
In relation to managing the contact on an ongoing basis, the more you get to know the bio family members the easier this will be - it may be straightforward, it may be very difficult and if the latter it will be like managing any other very difficult relationship.
The UEA post adoption contact website is
sites.uea.ac.uk/contact-after-adoption
The first part of the longitudional study done in the 1990s (or around then)
www.adoption.on.ca/uploads/File/The_benefits_and_challenges_of_direct_post-adoption_contact.pdf
and then the more recent update is longer and denser but worth reading, it covers the question as to whether or not bonding is affected and the short answer is that it isn't but there are many facets to that so it is worth reading it in full
www.uea.ac.uk/documents/746480/2855738/Contact_report_NEIL_dec_20_v2_2013.pdf
NB I am a fast skim reader, and have assumed you are too - if not I have just noticed that the website has been updated with summaries (which are probably worth reading too anyway). The same dpmt has written a book for professionals about how to manage contact which is worth you reading too
In terms of my experience, as per other thread I am an adoptee who was adopted as an older child, was fostered first (was in a care home before too), I have siblings who were not adopted, I am a parent and have had to help my dc through significant loss too, though they are bio not adopted, and derived from what I have read. Obvs my experience is limited to what has happened to me and my own perceptions but feel free to ask questions here or by PM