I like the idea of the mini 3-string guitar! It would be very cool for him, too, or at least I imagine.
Above all else, teach him an appreciation for good music-- classical, jazz, rock, everything you can-- and the wish to make good music will come naturally. However, it's equally important to give him the means to make that music. Guitar, obviously, is a place to start, but if he ends up wanting to play bass, you have to accept it. I can just see the conversation when he's 16:
"Granddad, there's something I need to tell you."
"What is it?"
"Granddad... I want to play bass."
"Bass? Oh no! Is that really the choice you've made?"
"It's not a choice! I was born a bassist, and I can't deny who I am any longer!"