Well, if it still goes around despite the sparking, and it hesitates as it moves it sounds as if you need to do some cleaning...
Without taking anything apart, clean the wheels and general underside of the loco. You can do this by wetting a papertowel with alcohol and running the front wheels on it while the back wheels pick up power from the track. While you can hold the loco in place and let the wheels slip, just don't hold it down so firmly that it stalls. Then do the back wheels. You might get a lot of black gunk off the threads.
You can also clean your track with the alcohol and paper towel. If you have brass track (recognized by its very yellowish-gold colour) you may want to polish it with MAAS polish to remove any oxidation. There are mechanical means as well (like BrightBoy "eraser") but they tend to scratch the track. Use with caution, and only if non-abrasive methods don't work.
Also - welcome to The Gauge!
I am interested in knowing a bit about Trainz - e.g. do you think it is better than MS Train Simulator?
Good luck! And have fun with the kids!
Andrew