Noteflight is a great introductory music notation website. On the site, you can notate your own music either one note at a time or by using a midi controller. When creating it from scratch, it has all the features you need such as rhythm values, dynamics, and different instrument sounds.
On Noteflight, you can view many other users' free arrangements. My first fear was about copyrights; you would have to be careful of this. Actually, this would be a great opportunity for a lesson on copyrighting in music production!
I listened to an arrangement of Pentatonix's version of "O Come O Come Emmanuel" for clarinets, and it was pretty cool.
In a music theory or music composition class, this site would be perfect for beginner composers or songwriters. It is easy to use and many of the functions are free. You can subscribe to the website; for $69 music teachers can use all of the site's music education features for a year. If you do not have the funds, the basic functions are great.
This website is accessible for any student with a computer, so the only limitation there would be if students don't have a computer at home. I don't think there would be an issue with student interest since this is creative and individual. I think if students are taking what they are learning in music theory/composition and work on writing/arranging for themselves outside of class, they will learn so much as musicians! Of course, students would be free to email me with questions.
For beginner students, I see them working on one piece of choice for the entire year/term. For more advanced students, they might have different themed compositions throughout the year. Students would then be able to share their work in class; maybe even have other students play the pieces for an added sight-reading practice.