workgroup vs domain

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I work at an elementary school in Los Angeles and our school just
purchased a Windows Server 2003 R2 64 bit. I have 36 computers in a
lab which I would like to connect to the server as a file and print
server. I want the students to be able to access the file server from
any computer in the lab to access their teachers shared folders where
they work and save their documents. I want to do this with as little
passwords as possible.
Currently all the computers and server are in a workgroup where they
can see each other. When I try to access any computer from the server
or any other computer, I am unable because it asks for user and
passwords.
On the server, I've set up file server and print server only, but I
cannot connect between computers. Is this an issue having to do with
domain vs workgroups and do I have to set up user accounts in
workgroup. Or can the computers connect and access the shared folders
on the server?
In my scenario, would a domain server be best or would workgroup be
all I need?
Do accounts and passwords need to be set?
What other questions do I need to ask myself before I continue
networking?

Any help is greatly appreciated.

1200 elementary students at my school would greatly appreciate any
help.
Yes, we are a huge elementary school!

.



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