Take control the moment before you feel the airplane or spectators may begin to be in danger. I sometimes get a new student that will tell me to take it, but I sometimes won't until they are truly in trouble. Most of the time I find that they can get out of the trouble themselves, and it gives them a big confidence boost. I try to give them the most leeway possible, but won't let them take it far enough that there's doubt whether I'll be able to save it.

At our club we typically have seven or so students show up on training night with around six instructors. The instructors are not paired to individual students. I have found that by far the most difficult aspect of instructing is remembering how each student best learns and being able to switch techniques every flight for the different individuals. It's actually quite tiring. All students are not the same and all benefit from different instruction methods different amounts. It is up to you to find out how your students best learn and to tailor you lessons to each individual. Some may show the best progress from multiple approaches to the same lesson.

Have you thought of giving students a short "debrief" after each flight? I have found this helpful and wish more instructors would do this. The flight line is a noisy place and can be stressfull for a new student. I try to give short explanations/demonstrations during flight and follow up with a more thorough critique in a more calm spot after the flight with the comfort of knowing their new favorite "toy" is safely on the ground. It can also be very helpful to pick up the airplane and demonstrate relevant topics/techniques with it (especially helpful for visual learners). You can't do that while you're flying.