It's for everyone in the party but if it makes you feel any better CRT does include gratuity and the photo package.. so you are kind of getting your money's worth.
If your party includes 2 aged 3-9 and 1 Adult CRT will cost 2 Adult and 4 child credits. If you don't want to use those credits you can pay for anyone you want.
You are probably best paying for the Children with credits and if you want to save your credits pay OOP for your meal there. That will give you 2TS credits for later. You would have pay OOP for them at either one Signature meal or two TS meals (just make sure they're non buffet and you should be able to feed them for under $20 at each meal). If you don't want to spend anymoney out of pocket just use the credits, eat a lot and watch your little darlings light up while they're in the castle.
Don't let being cheap spoil the magic. You can be cheap when you get back home.