I have done Shadow Puppetry before and on a large scale. Best to use rear projection screen or fabric that is mounted on a frame to be very taught.
Secondly, use a heavy cardstock or poster board, or light foam core board. You need to have lots of cut out areas to provide texture and quality.
If you want to do color panels in the puppets, lighting gels work wonders for this. Cut the area out of the puppet you want color in and then apply the gel with glue or tape.
It is best if front lighting is minimal and rear lighting is strong. The puppets should be close to the screen.
The students might have to lay down to not be seen, depending on your screen set up. Use dowels to hold the puppets
Use brads for the joints of the puppets, so they can move body parts.
I have also done front lighting and projected the puppets on the cyc in the mainstage.
Puppets who have dialogue also have the movement. Other puppets need to refrain from strong movement when it is not their line.
Experimentation will get you far.
Break a leg and may all your theatre seats be filled.
Kelly Thomas