Hi,
I donot see any issues with the machine settings as such. Yes you are correct that jeans is a bit heavey fabric and might cause this bunching up of the thread. Also I know you have changed the tension and rewound the bobbin, would request to try doing it again with adjusting the tension accordingly. The sew machine is working fine donot need to troubleshoot it.
http://www.sewusa.com/Threading_Diagrams/Threading_Pages/Singer_Sewing_Machine_Threading/singer_2001_touch_tronic_threading_diagram.htm
Let us know if you have something more to know else please accept the suggestion.
Thank You.
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