My gut feel is that it's probably not the best of situations... Perhaps they can have a separate, smaller cake for the candles and blowing-out ceremony -- and a larger one for the guests at the party to eat?? (If they or someone insists that DS should be blowing out his candles...)
If he has an active infection -- it's possible that he could impact someone else with a less robust immune system...
The likelihood of him spreading something to normal, healthy people is probably smallish -- but it exists... One of my infectious disease docs made an interesting point that infections are all about proliferation -- exposure to a small amount of bacteria can likely be handled and wiped out by our immune systems... It's when it's a larger amount, or the bacteria is allowed to fester/grow, or our immune systems are not strong enough to deal with that small amount and allow it to grow (immune compromised or suppressed... transplant... elderly... other issues...)
And -- the digestive tract is not the happiest place for bacteria to live... Acid in the stomach is going to wipe out a good amount of bacteria, though it's always possible for some to get through and thrive...
If there are other CFers that are guests -- I wouldn't even go there... The grandparents are possibly more at risk than most of the guests (unless it's an elderly crowd...) Ironically -- it can seem kinda ironic to others to try to enforce good sanitation and cleanliness around your son, to avoid spreading bugs he doesn't need, then have him spitting on their cake! ;-)
My gut feel is that it's probably not a big deal, and if someone is making a big deal about having it happen -- it's likely not going to hurt anyone... But, if you're aware he spits a lot, it would probably be prudent to skip that part of the celebration.
Love, Steve