You need to re-draw the circuit to be more readable. Something like this:

^{simulate this circuit – Schematic created using CircuitLab}

This has been simplified to match the diagram in the question. The motor needs the switch to complete the circuit. The LED, however has a return path to the negative side of the battery (GND), thus completing a circuit.

Once the switch is closed (ON) the motor has a path to GND, and the switch essentially shorts out the LED, so it is unable to illuminate.

Open the switch again (OFF) the LED is no longer illuminated, and the motor no longer has a path to GND.

This is the simplest way to explain it to a young child without overloading them with too much information I believe.

I hope this is helpful.

You need to re-draw the circuit to be more readable. Something like this:

^{simulate this circuit – Schematic created using CircuitLab}

This has been simplified to match the diagram in the question. The motor needs the switch to complete the circuit. The LED, however has a return path to the negative side of the battery (GND), thus completing a circuit.

Once the switch is closed (ON) the motor has a path to GND, and the switch essentially shorts out the LED, so it is unable to illuminate.

Open the switch again (OFF) the LED is once again illuminated, and the motor no longer has a direct path to GND.

This is the simplest way to explain it to a young child without overloading them with too much information I believe.

I hope this is helpful.