I try to setup the old beach boat as much like a new stock boat as you can. The lance cleats are a pain and hard for newbies and kids to use. The small Ronstan jaw cleats can be put in the same area as the lance cleats and work great. Get the eyelet that mounts with them to keep the traveler line in place.
I took another look at Mikes setup and just noticed that you have the starboard control cleat on the port side. It does clean up the deck and is a good idea. I wonder if this would be confusing to a newbie.
John: Hopefully some of those kids you work with will make it to a Youth championship or something similiar with supplied Hobie 16's. So I would try to copy the new boats as much as the wallet will allow.