I would recommend AP gov or even an honors gov class if he isn’t interested in AP. Most competitive schools want to see 4 years of the core courses.
I would keep AP Spanish. As you noted, it could get him out of language requirements in college.
I don’t think he necessarily needs both AP mechanics and chem, but my engineering daughter found them both useful preparation for college, but she was firmly shooting for engineering.
Your other question about what top schools are looking for is more complicated. I’m sure you know that every school you listed is a reach, even for the most qualified applicants. IMO, the competition at those schools will have taken multiple AP courses in English and history. Even for engineering, many schools want to see evidence of strong verbal and communication skills, even more so for business schools.
I would recommend that your student starts searching for match and safety schools (which everyone should do). For example, he should be an auto admit to IU Kelley which has an excellent business school.