As a current grad student, the numbers seem fine to me.
1. Too much info. Just tell 'em about the Roth.
2. Additional option if they "have too much money" is to place voluntary contributions into a Roth 403(b). My experience is that grad students can elect to contribute, but of course it is not matched. This is most useful if the 403(b) has access to index funds (e.g., TIAA-CREF).
3. On the behavioral side, play up the fact that their peer group is in the same bucket so there is little pressure to keep up with the Joneses. Game nights, the occaisonal night outs, renting a movie together: fun and cheap.
4. In the right market (e.g., low cost of living), consider buying a home when starting grad school. You can rent out a room to another student (and you should never have a problem with vacancies since you have a connection to a great pool) and you can elect to keep the house as a rental property after you graduate. This doesn't make sense everywhere, but it is worth running the numbers.