Download a free trial of Paintshoppro. Use the "hue" options - slide the blue/yellow one towards the yellow end of the spectrum.There are also other photo-editing softwares to consider that you can download for free (GIMP, Paint.Net, Photoscape etc.)
I am not familiar with Picasa, but it too is likely to have a colour balance or Hue slider. To reduce blue, you add yellow.
Do you have a scanner? - it is better to scan old pics than to take photos of them, as you eliminate the shake. Or does your camera have an anti-shake button?
Maybe you could ask a friend to scan them and email them to you if you do not have a scanner.
The whole project sounds a great idea - good luck with it!