You handled the situation correctly. Safety is everyone's responsibility. A gun should never be pointed upwards, over the backstop, especially with a finger on the trigger.
It doesn't matter whether this was his first time handling a gun or whether he'd been handling a gun for 40 years. His handling was unsafe and needed to be corrected immediately.
Here in MA, I know of one range that has been permanently shut down because of a single stray round. I know of another club that has had to realign their outdoor range and install overhead baffles because of a stray round. And a I know of a third club that spent $400,000 in legal fees alone to keep their range open after a stray round incident. In none of these cases was someone injured (thank goodness). It was completely appropriate both to point out the safety violation AND to point out the possible consequences of a stray round.
Safety is YOUR responsibility. If you see an unsafe situation, speak up NOW, before it is too late.
NRA Certified Instructor
NRA Certified Range Safety Officer