It's easier to recommend what could happen and what should happen when we're not in the middle of a charged situation. But from your post - it seems completely legit that both teams are booted for the season. If the league doesn't care particularly for a small club that has teams with spectators that behave this way, it's reason enough for the league to decide to boot not only one team, but more/all from that small club. Your team is not alone - reading the PAD notes are interesting from time to time, and every month there is a discussion of a variety of incidents that continue to happen, and I can understand why it's more expedient to have relatively heavy-handed rules rather than trying to deal with each situation on its own merits.
So first off - parents should never, ever, ever, enter the field of play and challenge a ref - no matter how egregious the call or the behavior they are reacting to. It's grounds for the parent to be banned for the season (or longer), and it reflects badly on the coach that they don't have control of their own team. Especially if there is some type of confrontation between players - there is literally nothing any parent can do that would help if they stand up and cross the sideline. A few weeks after one of our teams was banned, I was on the sideline at another team's game. U16 boys, more testosterone than brains occasionally, and a particularly physical game escalated to pushing, shoving, and eventually punches thrown - with multiple boys from both teams involved. Some of the parents got up and started to run towards the melee, but me shouting "****club name**** PARENTS! DO NOT ENTER THE FIELD!" was enough to get them to think for a moment, and return back to the sideline. The other team's parents also heard, and also decided not to join the fray. Probably because at that point it would be clear that they would look badly, but for whatever reason - it worked. The fight ended, eventually the game continued, and for better or worse - the ref didn't even bother to send in the report (I believe there were 2 red cards given on boys on each side). In your case - if the spectator actually struck the ref, I hope that the ref pressed charges and the spectator will be living with the consequences for many years.
I hope your kid finds a new team, and I hope that all the people involved with the new organization are more cognizant of their behavior and actions.