The animation is awful!
Even for its time! Compare this to, say Toy Story which was released in 1995.
It's a shame because even though I'm definitely far too old to be in its target audience I actually think its a nice little movie. I really enjoyed it, especially the efforts with the ballet. And as a fan of ballet I enjoyed the use of music from the Nutcracker itself.
It's just the animation that lets it down. I wouldn't mind a remake to be honest!