Usually how it works is for any ride where you have a child that is too small to ride, you present your party with your too-small child at the front entrance and ask for a rider switch/child swap. They will ask who is waiting behind with the child, and then give that adult the pass, and the rest of your party gets in line (either FP or regular). When they get off you can use the rider switch pass for you and at least one other person, sometimes 2 others, to ride. Our older child always gets to ride twice in a row because we get rider switch due to our little one being too small for the scarier rides.
If you have let's say 5 people in your party and only 1 child that is too small, you can go to a ride like Space Mountain and get just 3 fast passes and then those three go, and the other adult and the small child wait behind, then adult who stays behind could use the time to walk over and and get 2 fast passes for another ride - say Star Tours since its close. When the 3 get off of Space you can use the rider switch for the other adult and one repeat rider to ride. Then 2 people can go on Star Tours and get the rider switch pass, and then the other 2 can use the rider switch to ride Star Tours. Using Rider Switch just generally means you don't need to get as many fast passes at each ride so you can maximize more if you really want to, but sometimes the rides are so far apart (say Space and Splash) that it may not be worth traversing the park just to get the extra FPs at that time.
