If you read abount quantum physics, even the things that we all consider to be "real" (like the chair I am sitting on) are brought into question. In quantum physics, they use physics to show that concrete things in our physical world literally exist because we perceive them to exist, and the physical construct of the universe can change based solely on upon our capacity to perceive it. If you want to be blown away, go to YouTube, search for "electron double slit experiment," and watch the animated video that comes up. You will start to question reality even more than your children question the characters at WDW.
The purpose of my response is not to suggest that nothing is "real." However, I do believe there is something to the science of quantum physics. At WDW, I do not see animitronic children on Small World or a giant suffed mouse with an out-of-work college student in it. Through the magic of Disney (and the power of my imagination), I am completely transported to a place where these characters are every bit as real as you and me. I laugh with them, cry with them, and I learn from them. I experience their stories through tales of magic, excitement, and suspense. And, at the end of the day, I leave having experienced something that is far more impactful (and thus "real") than virtually anything I do or experience in the real world. Most importantly, I know that my children experience WDW the same way. When I see their eyes filled with joy and excitement, I know that they are having an experience that will change them as people and beneficially impact who they become. If that isn't "real," then I don't know what is.
This may be hard to address with a child (and I have not yet faced it myself because my oldest daughter is only 3), but I think the dilemma addressed by this thread suggests a false duality--i.e., things are either real or they are not. In reality (excuse the pun), the truth is far more complex. Our reality is what we make it...