my daughter is 4 and shows the smae signs . she is very confident in familiar surroundings but can become very 'naughty' when going into 'new situations including going back to nursery after holidays. i have found if i explain to her new situations and offer her plenty praise that this helps but does not eradicate the shyness.
You son is sooo normal. I worried just like you when my son was so shy he would hide behind my legs when his own grandparents came over!! I was told by a friend that kindergarten would open him up. I waited and now he's in first grade, class clown and gets sent home with notes saying he won't shut up and sit down! I think he's making up for all the years of hiding!! Try to be patient and if he's 7 and still super shy you could try something with him. I really wouldn't worry and tell people not to focus on his shyness, that seems to kids even more self concious.