...the heads simply don't move even tho it says its rewinding/ff...
If I understand correctly, the tape is moving in FF and REW, but nothing is read from it.
Is the tape moving in PLAY?
Heads are on the drum, are you saying that the drum is not spinning?
If the head drum is spinning it maybe the signal read off the trpe is too weak for digital and you get the blue screen.
How old is the camcorder (it came out about 22 years ago)? If the analog tape signal is poor compared to what it should be perhaps some internal components have changed value over time to the point of head amp gain loss.
Generally the safest head cleaning method for home users is to use a dry cleaning tape recomemdned by the manufacturer. While careful manual wet cleaning, if properly done, is usually better it requires some skill. Many people try it and end up making things worse - which is why consumer gear manufactureres usually do not recommend wet cleaning.