Sure it will make some differences, but if it involve RAM, i think that doesnt solve it. You know right, the more apps you install, the more RAM it will consume. Doesnt matter if it running or not. Galaxy W is limited on RAM. So i wanna suggest one app for you to try.

Try this if you never try it before. Since your sister's W is root, try Greenify app from play store. Just select any app (downloaded one) to be greenified when screen is off. It will force close those apps. Save the usage of RAM, and battery too. Just be careful selecting the apps. Example, selecting whatsapp will prevent you to receive the msg.

I think it will be faster when running apps or games installed on that sdcard. Even on xda they recommend to have at least class 6 to do the swap. But if the phone lag in UI, thats another story i think.

Lag in UI have nothing to do with swaping or sdcard class. In mainly cause by lack of RAM. There are apps that are running at the background. Freezing useless app, using custom rom, or using greenify app can reduce it. What rom did that phone use?

But dont take my word just like that. Try yourself.

EDIT: Or u can try changing to other launcher first. Look for light and low memory consume launcher.

Please don't expect too much from this phone. Hardware limitation > software improvement. Flashing a custom rom+ kernel will definitely help a lot but can't guarantee to solve the lag issue cause of RAM limitation. Btw, I still love this phone a lot because the devs never give up in developing new roms 

it depends. you would like more battery or more performance? if more battery, go for CM9 with kernel2.x
if you want performance, go for cm10 or cm10.1. (but the battery drain is very serious  )