On your method of teaching the "new" way:
Music in general was difficult for me to understand. It is somewhat for all, but it seemed it was somehow tougher to me.
When I was finally done with hours and hours of scale practice, hours and hours of learning other's "breaks", and hundreds upon hundreds of hours playing, I still couldn't "jam" or to me actually start becoming a musician. For me personally it's all about mastery of the instrument and the mastery of the "sounds" or "noises" an instrument makes. I have finally arrived there and love of those clacks, clangs, bangs, slides, bends, and notes. A person can become creative once they really train their ear to those sounds. You get your ear listening, your left hand fretting, your right hand flat picking and it's like breathing....you don't really have to think about them, they simply go to the noise you want to make. Man this is fun.
I mentioned scales a bit earlier. I could never "hear" a scale by simply playing it over a metronome beat. I had to turn on an actual recording(s) of some of our favorite pickers and fiddle tunes and play the scales over the song. I had to LISTEN then.
I advanced substantially once I learned to simply do scale practice in time with some popular tunes. This make me focus on "hearing". I can hear now and I accredit it to simply playing the scales over actual songs.
In your teaching may I suggest that you have an actual song playing and teach the students how to follow in time with the song while doing scale practice? This opened up an entire new world for me. I pretty much knew my scales and their locations on the neck. Once I forced myself to hunt for my major and mode of the song I in essence taught my ear "how to listen"....to those sounds/noises and if they fit or not.
Just a suggestion and I hope my post helps others that may be at the same point I was and need an idea on something to try.
Please report back to us how you think the group is handing it and some methods you use. I think it's a very interesting idea and could be an exciting way to teach.