My vote was for giving her the Kenmore you have. They are easy to use and hard to break! I have a 158. (Not sure the other numbers) that's going strong from the '90's.
My guess is your DGD would love some new fabric and a trip to the store with her grandma to pick it out. As for Sharpie removal, try nail polish remover. Or put a cute sticker over the spot if possible.