The pinhole effect has been known for quite a long time. The "camera obscura" name isn't generally used unless there's a lens (or mirror) involved; although one probably shouldn't be too fussy about it.
If the classroom has a small closet - or you can come up with a "wardrobe box" or something similar in size, creating a "sit in the camera" demonstrator could be a fun part of the lesson, especially for small students. Putting one kid in the "camera" and asking him/her to identify things placed outside by the others perhaps?
As mentioned, "blueprint" paper or the "whiteprint" paper commonly used to reproduce drawings can be used. It is relatively insensitive to low ambient light so that you can handle it without keeping it in total darkness if exposure is kept short and lighting reasonably dim.
Long exposures probably would be needed, but once exposed putting it in a "can" with a bit of ammonia should "develop" the image. You can probably just "wipe it" with a very slightly dampened ammonia swab for quicky use.
With "blueprint" paper the unexposed areas turn white and exposed and developed areas blue, making a negative.
With "whiteprint" paper the exposed areas turn white and the unexposed parts remain the original color (pale yellow, usually). With bright light or long enough time for exposure, you can look at the "exposure" in subdued light to "see if it's done." Exposure to ammonia or ammonia fumes turns the "yellow" to a permanent blue. You should be able to see the picture (in yellow) before developing it, but it will fade fairly quickly if left in the light before being developed.
There will be virtually no "gray-scale" to the prints. It's either white or blue in the finished picture. It's more practical really for "shadow pictures" where a leaf or other object laid directly on the paper and exposed. The image can be "fixed" after the exposed part turns decently white. It could work quite well in a pinhole setup for pictures of line-art posters, perhaps; although "real scenes" will likely be pretty "muddy."
Of course ammonia is quite toxic, but that's true to some extent of nearly all photo chemicals - especially if used with youngsters.
Youngsters may be quite happy with "negatives," in which case precut b/w print paper may be a lot easier to handle in loading, unloading, and developing than most films.
Almost any film or print paper can be "reversed" during development to make direct positives. You "partially develop" and then "flash" with a controlled light exposure to make a "negative of the negative" using unexposed photo grains behind the ones that developed on the surface; and then complete the "development." This is a very touchy process and not recommended for the inexperienced. Extra credit maybe - when they get to Senior Chemistry.