All perfect praise be to Allaah, The Lord of the Worlds. I testify that there is none worthy of worship except Allaah, and that Muhammad is His slave and Messenger.
The most important factor that helps a student in learning is having confidence in the teacher, liking him and being pleased with his behavior. Good moral conduct and steadfastness on righteouness is what is required from learning the Quran. Therefore, if your teacher is as you described but you find good in him, then it is more appropriate to be patient with his misconduct and bear his mistakes.
As regards how to rectify him, then you may seek the help of elder people who are close to him and who may influence him to exhort him. Also, we advise you to be good with him, behave properly with him and ask Allah to correct him. You may use any suitable means in this regard.
As for your question about taking recompense for teaching the Quran, please refer to Fatwa No. 86045.
Allaah Knows best.