Hi M.
Copy space followed by delete space is probably your best bet currently - you can only remove members one by one at this point, so if you have a lot of members, that could be painful. A space "purge" command would be a nice simplification that we should add.
One thing to be aware of is that currently, when you delete a space, all the projects in the space are moved to the respective personal space ("Your Workspace") of whoever created them. We will be adding an option to delete the projects instead in the future ... so you might want to hold off on doing the space delete until we've added that feature - otherwise, you'll end up with all the projects you created in the space in Your Workspace - and your students will get theirs as well.
Your members/projects limits are associated with your account, so you won't run into an issue there.