"It's time to gently encourage him to to remember fondly, not wallow in grief."
Very definitely do NOT to this.
I can only talk about the kind of traumatic grief that I am familiar with, but when a parent dies young, a child cannot avoid experiencing their absence every day, if for no other reason that that most of their peers will have two parents who are visibly present.
The experience of the death can feel isolating, because who wants to hear about something that is so sad, and after a while, particularly if you move schools, few people in your daily life will remember your parent as a living person.
You also suffer the loss of your parent seeing you as you grow and change, and can only remember relating to them as a younger version of yourself.
None of this is wallowing. It's just fact. Of course life has to go on, and it does. Humans are naturally resilient. The OP's child has a good attendance record and does not routinely skip school.
But there is no point when the father will not be missing, and taking a day this year to acknowledge that seems very healthy.