It's unlikley lubrication will solve you're grandsons problem.
He'll tell you that it has always "freewheeled" when he pedals backward. (A normal design characteristic, which is the cause of having handbrakes on the handlebars). Now (especially if he's the typical aggressive rider, like our 13 year old) he's caused something to shear in the gear/axle mechanism.
First thing is determining what kind of mechanism it is... 'Thread-on Freewheel' or 'Freehub'... here's a site than can help you with that:
http://sheldonbrown.com/free-k7.html ...
If it's less expensive bike,it's likely to be the 'thread-on hub type, in which case the most likely scenario is that (whether it's a threaded type or more likely a Shimano Freehub (very prolific)) is that the splines have failed and will need to be replaced. Often the spline failure only affects one set of gears so your grandson may be able to shift the gears and get one or more to still engage.
You could, as the article suggests, simply buy a cassette of gears and replace them... but that's going to take a special wrench. Sorry I can't be more helpful... Best of luck!