Hi Langwell, KISS, the damage to your picture was minimal and easily sorted by copying a small section next to the damage and pasting over it, a wee bit at a time until 'repaired' or 'disguised'.
However, to try to enhance the picture and repair small blemishes especially on the faces of the children the restorers need more fine detail to workwith, that is ; more pixels ( picture elements - think atoms or molecules ).
Jpeg is a compression technique used automatically by picture programs to reduce the size of the picture file, but it degrades the pictures details. To restore and repair we magnify the picture to replace faulty pixels or those approximated wrongly by the Jpeg and JPG compression.
Here is an example of a part of yours magnified by 8 times .... note the lack of fine detail.
A scan at more than 300 dots per inch (dpi) and saved as a PNG file would give restorers a better picture to repair in the finest detail.
cheers, Ian