I would say there's very little point reporting to head and not the proper authorities. You're still accusing the school of cheating, so all your concerns about your younger children are the same. And they will create a scapegoat and it will be hushed up. If you report to the proper people it is anonymous and they will decide how to deal with it and who to hold accountable.
Why would you tell your son you're doing it? Especially if it will make him upset? This is a problem for adults to deal with, not 10 year olds. Just reassure him he did the right thing in telling you, and explain why he mustn't cheat in exams in the future (not blaming him here, but in his future it'll be more student driven if it happens, the old notes under the table etc).
Yes, it could mean the results are void for the whole year, but it will be better for those children in the long run, and for your younger children too. The school will have to change what it's doing, and your younger children will not be caught up in cheating and fake results.
Teachers can be kind, caring, helpful etc and still be cheating. And year 6 teachers wave them off and don't have to deal with the next five years of the fallout. Your child might not be affected by an extra mark or two, but for some children it's going to make a massive difference, and they are going to be demoralised and struggling for a long time. No one would want teachers to lose their jobs, but what they are doing is not for the good of the children, it's for the good of the school. This is not them being over invested in your child, although it's easy to justify it as that, it is for them to meet their own results target. Performance related pay is a disaster for this sort of thing whole other thread. And before it looks like I'm bashing primary teachers, there's a reason controlled assessment is being got rid of in secondary, and it's the same one, too easy and too much temptation to "help the kids" gap fills for MFL writing for example. It's a real bitch when you're in a school that doesn't do it and you know your results look worse.
Sorry if that sounds harsh, but I'm hugely sceptical that teachers cheat for the sake of the kids and not for the sake of their own results. And they deserve to be reported. The consequences are clear to all teachers.