The funny thing is, the article didn't state that he was necessarily being cruel to the animals. He could just very well have a fascination with crocadiles (did I spell that right? Wait, I'm to sick to care right now!). People feed insects to reptiles all the time because the're insects. Who cares what they feel. Well, at 7 years old, he could have thought "Big Animal feels more then small animal, big animal gets small animal for food."
The thought patterns of children are simplistic, and while children at that age do have a basic undestanding of right and wrong, it is in a very limited scope. They think of right and wrong in Human terms. Oftentimes, non-humans are not given the same respect as humans. I myself never hurt animals, but my family had 2 cats. I never physically hurt the cats because I loved them, but one of them was very scittish, and when I was 7, I thought it was hilarious to scare the ever-loving crap out of him, no matter how many time I was told not to. By the time I was 10, I had stopped, but you get the idea. Both of the cats have since died of old age, my family got 4 more (oy, 4 fucking cats), and before that, I had a hamster. I've taken very good care of any animals I had to, but If you saw me when I was younger, you would have thought I would turn out to be a horrible person.
What should happen is that he should be given counceling. Not the wimpy "He has trauama we must discover" crap, but the hardcore "You're a fuck-up, and I'm going to fix you even If I need to smack you upside the head until your ears bleed" kind.
Sorry for spelling/grammar errors, but I can barely see because I'm coughing so much. Hard to breath, eyes tear, hard to see.