You'll find that Sheltie puppies are a bundle of energy, just like you're describing, until they aren't. They have two speeds: full tilt and crash, LOL. I've found that there are times you do have enforce "nap" time for your little guy...if he has a crate or an area where he routinely sleeps and can be confined, it's a good idea to see that he gets a few hours there morning and afternoon as well as overnight.
In my experience, for some reason puppies are always full of energy and play in the evenings! I currently have a 7-month-old who will tear around the house at night doing zoomies, tormenting the other dogs and tossing toys all over. Every puppy I've had has been like this. Then she sleeps all night, thankfully. So to answer your question, your pup is fine self-regulating his play with kitty. As for walks, I'd keep them short at this age, which you're doing, and build up as he ages.