Here's the whole idea in one breath: a chemical change makes genuinely new substances, ones that weren't there before — a physical change doesn't. Melt an ice cube and you've still got water. Burn a candle and you do not still have candle: you've made new gases that float off and never come back.
Two Kinds of Change
Snap a chocolate bar in half — still chocolate, just two pieces. Let it melt in your hand — still chocolate, just runny. You cut, crush, dissolve or melt something and at the end you've got the same stuff in a new shape or state. That's a physical change: nothing new is made, and you can usually get back to where you started.
Now light the candle on the cake. The wax doesn't just melt — the bit at the flame is burning, combining with oxygen and turning into hot new gases and a wisp of soot. That wax is gone for good. That's a chemical change: the starting substances are used up and new substances take their place. We name the two sides — the things you start with are the reactants, the new things you finish with are the products. Reactants → products.
The Tell-tale Signs
You can't see atoms regrouping, so how do you know new stuff has formed? Chemical changes leave fingerprints. Spot one or more of these and you should suspect a chemical change is happening: a colour change that isn't just mixing paints (shiny iron going to orange rust); bubbles or gas given off when nothing was boiling (fizzing tablets, bread rising); heat or light given out, or sometimes taken in (a flame, a hand-warmer, a firework); a new solid appearing out of two clear liquids — chemists call that a precipitate; and it's usually hard to reverse (you can't un-burn the toast).
None of these alone is proof — boiling water bubbles but makes no new substance — but stack two or three together and you can be confident. In the toy, when you tag an event as chemical, the signs it shows light up so you can see exactly which fingerprints gave it away.