@TheDefend given that aside of magic its pretty not developed world, they probably don't know how rainbow is created period so they gave it some holy meaning way back.
so main protagonist basically shown them that he is a god or saint right now
@JigokuShounen in ancient time it was normal give a supernatural explanation to things that they were unable to explain... an example of this are the lightnings in the greek mythology that were said be Zeus's weapons and were thrown on the ground when he was angry or for punish someone.
BTW in the next chapter we'll have Thor that come down and scold the little prince...
joke aside if he don't give a good explanation he we'll see like some kind of demi god or divine emissary.