The first time you save a document, they are exactly the same. Both allow you to name the file and tell the computer where to store it. However, if you make changes and do a save, it overwrites the original document. If you do a save as, then you can change the name and have two copies, the original and the updated file. This would allow you to keep a template for use again.
Most word processors have a spell check feature.
Use it and teach your children to use it. You still have to proofread. Also, teach the students to use the thesaurus for substituting a better word. Try to get your hands on programs which combine word processing and easy placement of graphics. These are referred to as desktop publishing programs.