Understanding how to read and interpret key signatures is very crucial for music students. I don't like nagging students to play C natural, when they would already know that if they read the key signature.
When introducing the concept of key signatures, I begin with a story about me in drivers ed. I tell them about my first experiences driving on a real road and my teacher pointing to signs along and road and testing me to see if I knew what all of the signs meant. We eventually came to a sign I had never seen before and I didn't know what it meant! I didn't know what I was supposed to do! We then discuss the importance of understanding signs.
Next, I show students these slides and we laugh at the silly signs. We then talk about key signatures...what they mean, etc.
When reading music, our eyes are 'driving' along the staff and we must know what all of the symbols mean so that we can play correct notes, fingerings and rhythms.