Get yourself a lipsync chart :-)
I didn't mind this, and I don't mind simple animation, as long as everything moves effectively. In yours everything was a little lifeless, and a large part of it was due to the fact that you hadn't used "ease in" or "ease out" in your tweens and the fact that the singers lips didn't move in a fashion remotely related to the lyrics. Lipsync is actually really easy, find yourself a tutorial and you'll see what I mean. You only need 9 mouth shapes to get a perfect lipsync. Send me a private message if you want me to help you out with it.
Other than these technical things, the movie is good, little kids will like it and I'm sure your friend is very happy with it.