I'm not sure what you mean by honorary. Universities bestow honorary degrees to those persons who have acheived high success in thier life's work, but did not go to that college or university. This practice usually makes it clear to the recipient that is what they actually have.
Unless the dan rank that was awarded to this student was like the honorary degrees universites give, I wouldn't necessarily say that just because someone is a senior (age) who recieved a dan rank that their rank is honorary. What makes a senior citizen's worth, as an aikido practitioner, less than the 25 year old? It sounds like you are more upset at him receiving a dan grade because of his irregular attendance and physical limitations. Maybe he has overcome a lot of them, and you are just not aware of it. Maybe he is much stonger in the areas where he is not limited.
Aikido doesn't require us to have perfect bodies to practice it. Aikido allows us to work around our limitations. We all have limitations to some extent and we all eventually will be limited by age one day. Once we do, will that make someone's dan rank less than others? One of my fellow students is in his sixties and his aikido is great. Yes, he has limitations, but that doesn't mean his 3rd kyu rank is "honorary". He can take me down in kotegaeshi as well as anyone else, and his iriminages are lethal.
The other issue about over teaching isn't indemnic to old guys with dan grades. It's part of a general ego problem that most of us have been guilty of at some point -- especially when we are proud of obtaining a new rank. A little word from his sempai or sensei will keep him focused.