Hi,
Thanks for your post. This is really an incredible idea to give singing lessons over ooVoo and I hope the audio issues are resolved for you.
To answer your question, yes you should upgrade to ver. 1.7. Some audio improvements were made for that version.
It sounds like you have enough bandwidth. After upgrading, I suggest you perform a test with one ooVoo user to see how the quality is. Then try with 2 users, 3 users, etc. Hopefully everything will be fine. If problems occur, it's possible that a specific user may have a problem with his/her Internet line or computer. Also there could be interference if all of the students have their microphones on. In this case, the students who are not singing should mute their microphones.
Thanks for using ooVoo,
Marvin