Thanks for your replies.
What the previous leader did was march the boys through a trail in our neighborhood, and counted that as both the "Day Hike" as required for AoL and also as the 3 mile hike option for Outdoorsman #9. It specifically says in the AoL that if the hike was used for Outdoorsman that you can't use it for AoL. I don't know if the previous leader didn't know this, or just didn't care.
I am taking the boys out on a shorter hike (for leave no trace) this next week and will count that for AoL, and then maybe try to do an additional requirement for Outdoorsman. It's not exactly a "day hike" but I think it's the best we can do for now.
I'll take the time to quiz the boys on the handshake, oath, etc. during our hike. Thanks for the suggestion to go over those things.
As far as to what their birthdays have to do with it, I am in a LDS unit and they advance boys with their age not their grade.