Arabic classes

We also teach kids to read Arabic in our local masjid. I've found that if we go through Ahsanul Qawaid, and we make sure that the students don't go ahead without properly learning their lessons, then learning about and applying harakaat seems to come to them quite naturally. I haven't found anyone having problems with letters once they get to the harakaat. The main thing here is that every student has his/her individual lesson. When I'm teaching, I don't move them ahead until they know their current lesson well enough. Sometimes it means that some students cover the same lesson for 2 or 3 weeks, but making sure they know it properly is more important than rushing through the book.

As for character building, fada'il of good character seems like a good place to start. I would cover the rights of parents, neighbors, respect for elders. You can present examples of good character from the life of Rasulullah (SAW) and from the lives of the sahaba (RA).