I posted this link earlier and it's a pretty in depth summary (if that makes sense?) of the events leading up to the first world war, especially enough for a high school course or an intro level college course.

http://www.firstworldwar.com/origins/causes.htm

It is worth looking this over. Now, I'll address some of your points where I can help most. I'm not sure quite how much I should cite here because, frankly, a lot of this is considered common knowledge as far as I'm concerned but if you do want citations for specific things that may confuse you I am more than happy to oblige.

Germany's foreign policy consisted mainly of their agreement with Austria-Hungry. Italy was also a part of this, but I cannot remember the why. They were all pretty frightened of Russia becoming more of a power on the world stage.

Okay this is the big one. One thing you need to look really into to give context to this is Bismarckian System as it's commonly called. There is a lot of reading on this, and this is something I've read over prior to posting this and feel it gives enough depth for the class you're describing.

The summary is that with the newly formed Germany, Bismark recognized the precarious situation Germany was in -- she was surrounded. Britain to the North with her ships, France to the West, Russia to the East, and Austria-Hungary to the South. In every direction Germany was 'squeezed' in by what were considered 'Great Powers'. Bismark's strategy in handling this was to create a complex web of alliances that made war either impossible or impractical in any way, and it worked. The common trope given is to have at least 3 of the 5 major European 'great powers' under one roof. The five being Britain, France, Germany, Austria-Hungary, and Russia.

One of the major situations Bismark feared the most was what the link I provided aptly titles the "nightmare scenario", that is a Franco-Russian Alliance. A guaranteed two front war and doom for Germany. He would immediately sign a treaty with Austria-Hungary as a mutual defense pact, notably against the mutual threat of Russia. Then he would create a defensive pact with Italy shortly after, creating a 'Triple Alliance' as it is commonly called. Italy was not considered a great power in these conversations but it was a front that was closed off.

It's worth nothing the reason Italy did not declare war with Germany was its pact was entirely defensive and the Austro-Hungarians and Germans were clearly the initiators of the war.

Bismark would use the pressure created by the alliance with Austria-Hungary to emphasize how it would be in Russia's best interest to sign a treaty with Germany. This is called the "Reinsurance Treaty". It was not necessarily an alliance per se, it was more saying that they would remain neutral in each others conflicts and thus eliminating a threat of an Eastern front and further isolating France. Bismark also emphasized a policy of being a land based power to avoid conflict with Britain, and making friends with them.

This all collapsed when Kaiser Willhelm II ascended the throne and Bismark resigned due to conflicting interests. Where France was formerly alienated from Italy and Austria-Hungary and unable to get Russian support in a war because of a secret treaty and Britain frankly did not care, France suddenly began finding a bunch of new friends. First, the Kaiser pushed the Russians away -- right into the French hands. The Russians would latch into an alliance with the French. The "nightmare scenario" had come true right out the gate. Kaiser Willhelm II also had colonial aspirations and began immediately building a navy to compete with the British. Where they were formally relatively cordial, relations turned sour as Germany began to compete with what was at the time the uncontested naval power. Britain was now pushed away.

I cannot remember why Britain and France had allied at this point, nor do I remember why Russia is allied with them, either.

Britain and France were not formally allied. In fact, Britain had initially little interest of getting involved in continental European slapfights when WWI was brewing. What brought them into the war was the breach of Belgian neutrality. The Germans, part of the Schlieffen-Moltke Plan opted to swing through Belgium and into Northern France, crush Paris and cause mass encirclement against the French military in an attempt repeat of the Franco-Prussian War. This, again, required breaching neutrality of Belgium -- whom the British had under protection. This was what would bring Britain into the war, not an alliance with France.

France and Russia were allied because they were, after Willhelm II pushed the Russians away, isolated politically and found a potential mutual threat in Germany.

I know nationalism, the arms race, and a few other aspects had to deal with the start of the war (Ferdinand being the most immediate example because he was about 1 month prior to the war breaking out)..

If I had to teach a class session on the outbreak of WWI, I honestly would not focus on the tropes like 'nationalism' and Ferdinand and powder kegs. Many people look at WWI as a prelude to WW2, but it's more appropriate in my opinion to look at it as a conclusion to the Franco-Prussian War and that's how I believe you should teach it. It will almost certainly be a new direction for your students and would get their attention instantly.

Start off with German unification. Start off with how the French were destroyed and humiliated and spend time talking about Germany's success' and immediate rise to world power status and how spiteful this made 'old' powers like France feel. Talk about the complex web of alliances Bismark used to keep peace in Europe during his tenure and emphasize the weakness' that he felt were most threatening. I would spend at least half the class talking about pre-1900's basically and most of that time would be in as you said, the naval arms race and the diplomacy and the alliances. I would contrast the aspirations of Bismark to Kaiser Willhelm II and then bring it all together saying how it ended up immediately before the war.

One thing my professor did when we went over this many years ago was bring the class into the discussion. He always said, I don't teach history, I use history to teach and that's something I still believe in. Ask these students -- was Germany necessarily "evil" for wanting more colonial aspirations, to have a more secure position in Europe, to have the same prestige as its neighbors, to isolate its greatest enemy that honestly did want to crush them? The formation of Germany came at a horrible expense on the French and many compare the stringent nature of the Versailles Treaty to the Treaty of Frankfurt signed in 1871 against the French. This was, ultimately, a war of revenge for the French.

The intro to WWI is one of the most crazy times in history and it brings up so many moral issues like colonialism, military spending, success at the expense of others, and national prestige. Don't just spew out facts and don't rush through it to talk about the consequences or buildup to the more popular topic of WW2, get them talking about it! This should be one of those sessions where most of the time is spent in conversation with the students and them speaking their mind rather than fact spewing in my opinion.

Lastly, I recognize that military history isn't the sexiest topic for a classroom and the social/political issues are more pressing. I would, however, recommend spending at least some time talking about the war aspect as the changes on military strategy forever are worth noting at least offhandedly. If you would like more info on that, don't be afraid to ask as that's more in my wheelhouse and I'd love to help you create a lesson plan of sorts for that!