12 MONTH OLD IN 5% RATE?

Percentiles don't matter that much. As long as they're ON the chart is what matters. The chart is there as an indicator of other problems. Being at 5% doesn't mean there is a problem. It means there might be a problem.

The things you mention that actually indicate problems are the fact that the kid can't hold his own bottle, only recently started crawling, and the parents aren't giving him a wide variety of foods. The first two things sound like a muscle tone issue. Which might also explain the need for mushy foods (or this might be parental paranoia). Either way, those things ARE abnormal, even if the 5% thing isn't abnormal.

I think he's definitely old enough to be eating some adult food and probably should be holding his bottle. but being small isn't really anything to worry about, unless he isn't growing or very active. my son is now 3 and has been in the lower percentile range (never that low) since he could crawl. He's very active, and eats good he just burns it off as soon as he eats. The bottom line is what his doctor says, if the doctor says he's ok then he's probably ok. another thing is was he premature that can put a baby behind some. but every kid is different and they all develop different.