I'm attaching a photo of how we set it up. Basically it's in the basement - we took two 8' long tables and then put down a foam base, leaving access in the middle.
Well, from here it's switches, and crosses, perhaps elevation.
Anyway, if you keep the side straights the same length and space them about 6" apart center rail to rail you can enlarge the O36 and keep the bridge placement. (see attached pdf)
I see a couple of 10" straights, you'll need a few more. You could use 4-10" that have between the curves and join the centers on the ends with the 5" pieces. That would use what you have on hand for a larger O36 loop.
While the loops may seem simple, they are reliable. What would make this fun for son depends on his interests. Doing scenery makes a simple layout look really nice and look more than just ovals. paint a base color on the foam and glue some scenic material down, make trees or buy trees and bushes, carve some terrain into the foam beforehand. A lot of these activities can involve a young child and create some fun time.
The other activity is to give the train something to do. Pick-up and unload stuff. So, a couple of switches and sidings off of the O36 loop to something will provide play value. That's one reason that I moved the O36 closer to the edge. Reach to play.
Read this thread layout for a 7 year old - I think you'll get some ideas.
For the SCARM file - right-click the attachment -select "save target as" or "save as" and drop on your computer and open it with SCARM. The table is 8' x 9' by counting your tracks in the photo. Pull a 10" on the sides if it's too long.