My DD5 demanded to leave when we were there in November. We had taken her previously, when she was 4, and she didn't like it but was okay as long as she could hide behind something at the scary parts. This time she just said "I wanna get out of here!" My Wife took her out, and reported that there were many other families bailing out.
The show is VERY loud, which is enough to freak out some kids by itself. The villain scenes are pretty intense. They project pictures of pretty much all of the Disney villains, in huge size, on screens of water (you have to see it, it's pretty cool). The villains all talk about what they are going to do to Mickey. I think this is what gets my DD more than anything, the idea that Mickey is in danger. ("This will be the END of Mickey Mouse!" etc.) Jafar turns into a huge snake on stage, which searches for Mickey and scans the audience with eyes that project beams of light. The dragon from Sleeping Beauty also appears on stage. Again, it is huge, realistic, and pretty scary (also extremely cool, but that's off topic.) It breathes fire, that ignites and spreads across the water at the bottom of the stands. It is very close- you can feel the heat of it.
I'd say think about how your child reacts to the scary parts of the movies, explain in full what they're going to see, and be ready to make a fast getaway if they freak out.