OP, thanks for posting this. My class got shown this at school in our weekly TV room session. Usually watched Words and Pictutes, but I think we got this as a Christmas treat. I love all stop motion animation from that period. I was 9 at the time I saw this one so don't recall being frightened by it, but there is something creepy about The Pied Piper in general (leading kids away).
I will watch these links and probably have a cry at the nostalgia.