Continuity mistake: When the kids are playing "follow the leader", they show the same kid (same exact clothing, hair color, and animation) hopping over Frosty twice, back-to-back. (00:09:37)
Continuity mistake: When Frosty gets off the train because Karen gets sick, from the magician's view it appears the train is slowing down and is very close to Frosty, but when the shot goes back to the magician, the train appears to be going much faster and is much further away.
Other mistake: The narrator says that the train stopped to let the train filled with Christmas carolers go by, but the train passed after the train had already crossed the tracks, so there was no need to wait. (00:19:30)
Continuity mistake: In the beginning when the kids are playing and they create Frosty, why is one girl outside without a coat and the rest of them are all wearing shorts if it's winter?