that he'd love to have a party at the local Swimming pool. They actually organise the food, entertainment etc.
This makes me think it is an organised party by the pool people. We have been to parties like that were they have 1 or 2 instructors (depending on how many kdis) and they do activities with them, then they get out and have something to eat and then go home. If it was something like that then I would say fine. they even go on the big blow up slide thing but they go in a group with the instructor.
If you are just taking a group of kids to the pool I probably wouldn't do it at that age unless the parents were staying.
We took my DD (10) and 7 friends to a water slide place last month for her birthday, they loved it and there were quite a few parties there with much younger kids.