Most routers have some basic network filtering that you can do. They usually don’t provide any sort of content monitoring though. They also usually don’t support any sort of quotas for network transfer.
If you are not running an anti-virus and firewall then yes there is a possibility for a virus to get into your machine from there machine. As you are running McAfee Security Centre, you are probably OK on that front.
The router probably has come basic activity logging. What IP addresses are going to what IP addresses, but there probably isn’t much that it will show you.
Instant Messaging it self uses almost no bandwidth. As for video streaming, that will depend on how good the quality of the video is. Unless it is very high quality video the bandwidth requirements will be fairly low.
By idle mode do you mean suspended? If the machine is suspended (you have to hit the power button, but then it comes right back into Windows) then it is not using network bandwidth. If the laptop is closed but still running, then yes they could be using bandwidth while not using the laptop.
How much data transfer does your ISP allow you per month? If they used up several gigs of data transfer in a couple of days then they are probably using some sort of peer to peer file transfer service such as bit torrent.
The easiest and cheapest way to block access to the Internet is to unplug the router when they shouldn’t be using the Internet. This will stop the network traffic 100%.
As for monitoring what they are doing, there are several products on the market which you can purchase. You would need to install the software on the students laptop to use it. Some require that you use the machine being monitored to view the log, some do not. One which doesn’t is called Web Watcher (http://www.awarenesstech.com/). It’s not that expensive, and should give you a good idea as to what they are doing on the Internet.
Note that you may not actually need to monitor their activities unless they outright refuse to co-operate. Let them know about the bandwidth situation and how it did not happen until they arrived. It will show that you know they have been doing <i>something</i>, but give them a hint of privacy… which is often respectable. They may be willing to curtail whatever activities are consuming excessive bandwidth.