The problem is that the contents itemsare Element objects, not jQuery objects, so the function is slideToggle()not available.
To fix this, you need to convert them:
$(items[i]).slideToggle();
Alternatively, you can convert all the logic to use jQuery, instead of having the pretty odd half / half solution you have now:
jQuery(function ($) {
var $ul = $("#menu-footermenu");
var $items = $("li");
$items.filter(':gt(4)').hide();
$('#morecat').click(function () {
$items.filter(':gt(4)').slideToggle();
$(this).hide();
});
});