Playing them has nothing to do with demotions. I don't mind demoting players but, if they're the best he has, there really would be no point in demoting them.
The only "real" concern, in my mind, is starting the arb/FA clock. If you start it on a group of players at the same time, you run into budget problems down the road.
Not telling anyone how to run their team, because, you know, it's their team, but I took a similar team in Hamilton. A ton of young guys in the bigs too soon. I think I had 18 who would hit arb at the same time. I moved a group of them back to AAA before ST and signed some comparable, low level FA to manageable contracts. Managed to win 75 games(up from 65). Then, the next season, moved some of them back to the bigs, won 89 and lost a 3-way tie for a Wild Card. The contracts I signed in S1 will be gone and I'll move so more of those guys up. Managed to win games and control my payroll for seasons to come.