Graybags, how you approach him is down to you. You know what approach is best for the situation.
My only concern here is that if he doesn't know these basics, then what is your bathroom going to look like when he's finished?
My Brother in Law had his kitchen tiled by a complete chancer. I've never seen such a bad tiling job in all my life! The real shame is that he had spent a small fortune on these tiles.
The problem here is that I suspect this job is out of this guy's depth. This may make you feel awquard but either you want to come out of this with a job well done, or you want to avoid upsetting this guy, you may not be able to achieve both.
If it were me, I would probably pay him for the time he's spent at your job and ask him to stop and pack up. You can make an excuse to the effect that your wife hates the tiles and apologise for causing him an inconvenience.
There are plenty of good tilers on this forum who are short of work. You don't say where you are but if you PM Dave or ask in the Tilers Wanted section you will no doubt get a few replies.
It's a tough call but at the end of the day I assume you and your wife want a good job done.