Chevrolet could be vicariously liable for the errors of the dealership but I would prefer to pursue the dealership individually. Don't know about the Z06 as I don't think that was a Z06 but I am no Corvette expert. He gets like kind and quality. Not better than what he had. The color is right. The faster option would be to run it through his own insurance as you suggested, total it out and buy another one and let his insurance company subrogate against the insurance carrier for the dealership. Invariably, I would not accept a repair. That would be a no starter for me. I'd just file suit and nail them for accelerated depreciation. (If that cause of action is allowed there in that State.)
As an aside, if I were to own a newer Corvette, I would opt for a 2019 ZR1 instead of the 2020 mid-engine.