So I would love to get this for my space happy son. Currently in 3rd grade and very interested in engineering and science. However he has a 3rd grade set of math skills, no physics, algebra, etc. Think, just learning division. Based on reviews this would seem like a great game but I am concerned the physics aspect may be to hard to have fun with at the moment.

My question is this, do you need to truly understand what your are doing to be remotely effective or can you piece together a rocket and make it to the moon with a reasonable amount of trial an error? Or perhaps, does the game provide general direction on how to proceed?

You'll probably need to help him out while he learns, but for the first portion of the game there's little math involved. You might be inclined to do a bit of division to figure out the efficiency of the various engines (thrust / fuel consumption) or how fast your rocket will accelerate (thrust / mass) but that's not strictly necessary. The game calculates your trajectories for you and provides you a flight planning tool to preview different maneuvers. There's a quick-save/quick-load function and you can also reset missions, so if something doesn't work (your rocket is too heavy / not enough power) you can just reset and modify it. The bigger problem is the game's tutorials are insufficient, and don't adequately cover the all-important skill of getting into orbit. If you can't do that, you're not doing anything. Once he's over that hump I think he'll be fine, but having an adult to help him over the game's steep learning curve would definitely help.

The game gets more mathy when it comes to interplanetary missions. Fortunately, there are online tools that can help you figure out what planetary alignment you're waiting for and which angle you want to launch from to perform those missions.

Hope that helps.

I made it to the moon and back, and even to Duna (Mars) by pure trial and error, without doing any math. That said, even if you don't have to make calculation, you will need some basic understanding of physics : orbits and gravity, air drag, why an asymetric push (or an asymetric ship) will not fly straight, what a planet rotation will do to your liftoff and landing... But the game is a great oppotunity to learn about those things by experiencing them firsthand, and then looking/asking for an explanation. Especially if he's already interested in those things :)

A warning, though : As was said, getting to orbit can be frustratingly hard, especially since some things are counterintuitive (top heavy rockets are more stable at liftoff, adding engines can slow you down, going too fast can be dangerous and waste fuel, a purely vertical ascent is inefficient...) Again, trial and errors (or some youtube tutorials) will help you overcome this hurdle, but it's not easy.

But the sense of acomplishment when you manage to do it, and get to orbit or to the moon for the first time is... Wow!

there is a demo. best thing is probably to let him play that and see how he handles it. If he wants more, buy the game.
But you don't need math to play the game. And even lots of the physical aspects can be grasped intuitively from the gameplay, without understanding the formula behind it.

If your rocket is heavier on the left, it won't go up straight but turn left ...
a streamlined rocket will be easier to control than one with parts unevenly sticking out in every directions ...
if you are in orbit you can easily see and understand the logic of how your flightpath changes depending on where you accelerate/brake. You don't need to know Newton's law of gravitation for that :)

That being said it requires a certain amount of perseverance to find out how stuff works. And parts of the game will be surely out of reach for someone that age. Also as the other already said the tutorials aren't that good.
It's hard to say much fun a 3rd grader will get out of this. Looking at my niece I usually underestimate what kids that age are capable of, but still I would give it a try with the demo first before buying.

//edit:
there is also this nice quote from the KSP fans @NASA:

Thanks for the thoughts and info all. I was totally unaware there was a demo, will need to get that ASAP.

Isn't the demo build in the ancient 0.13 version? Or did they publish another one, closer to the current program?

yes, it was updated to be on par with 1.0.
don't know if it contains the physic changes we got after 1.0.