I'm not all that familiar with "magical realism". However, O, Bother Where Art Thou? popped to mind. Don't know if this is really practical for a class room experience due to the fact its an hour and forty-five minutes long.
Did a little searching online whilst reading this and another good movie that popped up with association to "magical realism" was Unbreakable. Another long one though...
Good luck!
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If that makes any sense...
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