It is certainly fine to keep your relationship as it is if you are ok with letting his issues go as they are. If you do want your relationship to become more serious however, you may need to review these issues with him and see if he is willing to compromise. Your idea of having him move a bit away from his mother is a good idea. He should be less dependent on her and form a better bond with you.
But if you decide that the relationship cannot overcome his issues, separating can be very difficult. It takes time to mourn a relationship and move on. But in the long run, you may save yourself a lot of heartache. Either way, you have to care for yourself and be sure that the relationship is what you want for you.
You're welcome! It was nice talking with you. My best to you.