Colleges evaluate students based on what is available to them at their high schools and don't penalize them for what is not …. well, at least in theory. If your son is applying to Ivy engineering programs and has not been able to take physics in high school, he would be wise to seek out a physics course online or via a summer enrichment program. (The latter can be pricey although some do offer financial aid for those who qualify. Perhaps there is also a community college within a commutable distance where your son can take physics over the summer or in the evenings in the fall.)
Since your son is a strong student in a rural school that probably doesn't often send candidates to the most selective colleges, his background could be a “hook" for him, and I don't think you should steer him away. But many aspiring engineers who apply to the highly competitive colleges seem to manage to find a way to take physics, even if it's not offered at their high schools (which is pretty rare). If your son applies to engineering programs without physics on his record, it won't be an automatic deal-breaker, but it will definitely work in his favor to seek out a physics class and take it on his own time.
Here are a couple (of many) threads on College Confidential that discuss online physics classes.
You can also ask the school guidance counselor–if you haven't done so already—to find out if there are online or summer courses that other top students have successfully taken in the past.