As you say he is losing confidence, I'd start there. I have a dyslexic 7 year old, so lots of issues with reading, writing and especially spelling, but confidence and self-esteem are absolutely the foundation for everything.
Help him look back at how far he's come. Read for pleasure - it can be a trial with early readers to find material they really enjoy, but it's out there. Project X Alien Adventures and Project X Code are great. Paired reading (where you read together) or taking turns to read a paragraph or page, helps if confidence or stamina are a barrier. But mainly, enjoy books together. Talk about books together (making it conversational rather than testing him on his comprehension overtly, if you can - be genuinely interested in the questions you ask and share your ideas too).
I wouldn't abandon writing (we left it to school and regret that now) but make it low stakes and give it purpose. Helping you with a shopping list, or writing a letter to a family member, or starting a correspondence with the elves at the end of the garden (you "plant" a letter from them asking him to write back) might get more traction than worksheets. Or make it playful - chalk on the patio, that sort of thing.
Letter reversals (especially b and d) are common at that age. Lots of multisensory ideas to help if you Google. But interest and motivation come first.
Spelling - I'd be led by him, up to a point, and not make an issue unless he asks. Phonetic spelling is all part of the learning curve at that age. But maybe look at the list of regular and exception words they are expected to know by end of year 1 and if he is struggling with them, point out no more than two or three errors at a time and work on those. (On the one hand, reinforcing incorrect patterns by letting him repeat them over and over, ain't going to help, but too many to focus on at once is demoralising and impossible.) Something that works for us with confidence, is circling the error and looking at how much of the word is already correct. Also, talking about being a brave speller and having a go if unsure, but underlining the word to check later (so it doesn't stop the flow of writing). We make a point of modelling being unsure of spellings ourselves (I pretend to need to check, dyslexic husband doesn't pretend!) and letting him see us checking and editing our own writing so he can internalise the idea that it's part of the process and you don't have to be scared of making mistakes.