So, I decided, for Swords & Spelling, I am going to pair it down to just be about wizards.
Spelling Wizards has a cool name anyway, and I think it removes some of the confusion.
There will be 3 magical skills:
Conjuring - you can draw a number of letters, equal to the skill, from the bag.
Manipulation - you can manipulate a number of letters, in play, up to or equal to your skill.
Vanishing - you can make a number of letters disappear, equal to the rating of the skill.
Each character still has a magic pouch, where you place excess letters (drawn at the beginning of play and given for solving puzzles and beating creatures).
The main action is spelling words, but with the skills above, you can manipulate letters in all sorts of ways.
This way, the GM can actually place a GOBLIN into play, and say, OH NO, THE GOBLIN IS RUSHING TO ATTACK! Then, a spelling wizard could rearrange it to be something else, add letters, or make some disappear. So, one wizard says, I'll use my Vanishing of 3 to make three letters disappear, and he chooses LIN. Then, another wizard says, I'll rearrange it, and makes it say BOG! Now, it's not a GOBLIN any more, it's a BOG that they must cross.
Something like that anyway... and so I can have them come across a stream with a RIBEDG, and the kids can be like... what in the world is that? And they can solve the puzzle to get across the stream and so on.
That's a rough writeup, but I think it's simpler and helps kids learn how to spell in many, many different ways. Plus, it could be a hell of a drinking game with adults.
But what about...
If you have a wizard that has:
Could said wizard search for an F, an L, and a Y from his sack to FLY across the stream? Or would that fail because FLY is shorter than stream or RIBEDG?
Could said wizard vanish R, B, and E and manipulate the I to DIG under the stream?
Certainly said wizard could not build a BRIDGE because his manipulation is too low.
But what if he could build the bridge, what would happen to the BRIDGE after he crossed it? Would it all go into the wizard's pouch? What if the wizard had to DIG, would only that go in the wizard's pouch?
Wouldn't these new rules make it much easier to defeat monsters? Someone who's facing a TROLL to cross a bridge would never vanish the R, because then he'd still have to pay a TOLL. He would always vanish the T, so he could eat the ROLL.