Switching from an individual storage plan to a shared family plan

Yes, it is correct. Each member's space belongs that that unique Apple ID, but the accounting for the storage space is aggregated among the members.

He, as we all, should also have a Time Machine backup which is the best way of having a backup to all data. If he is concerned make sure that this, or some other backup, is in place to reassure him that all this is safe.

These two support documents describe Family Sharing

What is Family Sharing?

Share an iCloud storage plan with your family

I set up a Family Sharing plan and invited the others in my family to it. At that point they had only the free 5GB plan and when they joined the group nothing had changed except they suddenly had not 5GB but up to 200GB to use.

When he accepts the invitation the billing for his 50GB plan will cease and a small pro-rata refund will be issued.

Yes, correct!

On his device he'll see the option to move to the Family plan and everything will be moved to the new storage. Everything should be transparent.

Just make sure in the Subscriptions that his individual plan is canceled now that he is under the Family pack. I'd advise you to give Apple Support a call just to make sure you're not paying double after the migration, OK?