We always do the "dinner and a show" package with one of the restaurants at the Studios. In January we did the Brown Derby. It was a set price ($35 /adult and $10 /child I think). You got an appetizer, entree, dessert and beverage. When you finished, they give you a ticket to get into Fantasmic in a special seating section, but you don't have to get in line nearly as early. I think we go in about 30 minutes early. The seats are to the right of the seating area, not in the center. But, it is possible to move to the center once you get in. The only potential problem is that the times available for the dining are pretty early. I think ours in January was at 4:30 or something. I don't mind that, though. We'll basically skip lunch, have a big early dinner, and then maybe bring a snack into Fantasmic.
I agree to make sure that your little ones are up for the show. It can be fairly scary. My DD who was 5 last time we went (and pretty brave) was a little worried about all the fire and sound effects and such.
Have fun!