Both sentences are grammatically correct, but we can make them clearer for a 6-year-old.
Clear and simple version: A narwhal's horn is actually a very big tooth called a tusk.
Another good way to say it: The thing that looks like a horn on a narwhal is actually a very big tooth called a tusk.
Notes: using "narwhal's horn" (the possessive) sounds natural, and adding the word actually helps show that this is a surprising fact.