Hi Ben,
Interesting questions and I really have no answers but a few thoughts. There is a bicycle co-op in town, and its been here for years, and I've always thought about doing something like it with woodworking would be a great idea. I find many are intimidated by the idea of woodworking and if you can just get them started building or fixing little things then half the battle is won. The community college here has woodworking classes (competition) but I think they jump right into the fancy power tools which intimidate many people. I think there are some woodworking co-ops around, maybe a google search.
If you were doing classes for kids and adults (which I think is a good idea. A mom helping in one of my classes for really young kids asked, "can I take this class") you would need separate spaces so there were no power tools around the kids.
I think woodworking is safer than riding a bike or playing baseball but its hard to convice people of it. See the safety chapter from Woodshop for Kids at: http://www.woodshop4kids.com/wfk_safetychapter.html
As for insurance I talked to several agents and they gave me either nothing or outragous rates. As long as I'm not using power tools and the kids are wearing eye protection I don't worry about it any more.
hope this helps a little
Jack
