D.N.
My husband was a school bus driver. He had a route with older kids and could not believe the mouths on them. He drove in affluent areas so really was shocked that kids with so much were so disrespectful. Not saying though that they were all like that. He put his foot down the first time someone acted up. He had one kid, an 8th grader, that was totally out of hand. The kids ended up being kicked off the bus and had to have his parents take him to school the rest of that school year. Do not be wishy washy ever. Make sure they know that you are in charge. One thing that might help is saying hello using their name each day. That helped one of his fellow drivers when she was new. She introduced herself and made the child introduce him/herself as well.
Now, for your suggestions, I think it is a fantastic idea with the younger kids to reward for good behavior.