I don't think he's too far back at all. He just needs to rotate his pelvis, like you say:
http://www.bikeforums.net/road-cycli...discovery.html

More good position photos- you can ignore the hand pain part, just look at the photos:
http://www.bikeforums.net/road-cycli...l#post12953035

IME a good position should have elbows just clearing knees when on the hoods, forearms horizontal.

A video:
https://www.youtube.com/watch?v=z04uoO7U_SA
You can ignore the pedaling advice and just look at her position.

One can also get back pain just from having a weak back. However, cycling is perhaps the best back exercise ever, so if position is correct, more cycling = less pain.