I’m not sure of your ratings spread or if you have a local interscholastic program. (We do here, but everything I write below may be impractical for you if you’re a lone school in a lone environment.)
First, you will always encounter players who simply want to play a game of chess and are not interested in improving their skills. It would be interesting if in both scholastic and adult populations it could somehow be measured how many chess players want to commit to learning, and how many simply want to pass a few hours playing a game with someone. My guess, strictly on an anecdotal basis, is that 50-66 percent minimum of scholastic players are this way. As someone who vacillates between the two positions (and as a dog who sometimes feels like I’m getting older,) I’d say that if you have the players actually playing you’re not doing bad.
That said, I can think of ideas: impractical, maybes, and good.
Impractical: Establish an ‘up or out’ system where players who do not demonstrate their improvement can no longer be there. Yeah, that would go over well. [Based on a suggestion from a friend and coach who would never be able to get it implemented at his school… They must accept all takers, despite all other sports having caps for their ‘team.’]
Maybe 1: Kids will only get so far with books. (If books alone could inspire and teach all students, schools would simply be libraries.) Do you have any budget? Could you manage to a) hire an experienced enough coach, b) pay for Think Like A King or similar, c) utilize Internet resources (Chess Tactics Server, Chess.com, etc.) and/or Chessbase over a projector?
Maybe 2: Any chance of your bringing guests in for a short visit and pep talks about what one can learn? I see you have a Fide Master in your chess club, and you aren’t a universe away from inviting a Grandmaster from Chicagoland - dunno if you can get one free or reduced budget, though.
Maybe 3: (Also thanks to the same friend above…) Establish a “Chess Team” separate from the Club. Anyone can be in Club and play. But to make the Team, you have to work in Club and off club. (Not win, work.)
Good: Establish a Club Ladder. Either challenge based or wins 3 point, draw 2, loss 1 (against unique players.) Have enough end-of-year prizes to reach down past your top 10%. Lean heavily on the ‘well, if you study as well as play, you’ll go up the ladder’ aspect.
Good 2: Offer ‘problem(s) of the day.’ Each solved correctly gets a gold star on the chart. Top number of Gold Stars gets __________.
Final possibility: Raise funds or otherwise achieve a field trip budget. Top X players (or the “Chess Team” above) get a field trip to a tournament, paid fee and membership, etc.
Just some thoughts… good luck!