Few things on ET (rode it yesterday

) the handlebars come down but they are also attached to a padded piece that holds over your thighs. It is pretty secure and presses down on each person as far as they need to be secure. Though they aren't truly "bench" seats you will have no trouble putting your arm around your daughter. The bike seats are right next to one another (4 per row).
Also - this ride can be scary for kids! You are driving through dark woods as cars turn their lights on and pop out at you. I would not let your younger daughter ride on the end seats as it feels like you could reach out and touch those things!
The first time my little sisters rode when they were 5 & 6 they came off sobbing. This was the very first ride we rode after buying passes to Universal for the first time. They were screaming that they wanted to go back to Disney!!

A team member came running up and told them they were really sorry that the ride was too scary and asked if we would trust her to pick our next ride. She walked us all the way back to Hanna Barbara (sp?) and walked us to the front of the line. When they came bouncing off the ride she was waiting with a line of stickers for each of them as tall as my sisters were!! This was 15+ years ago and we still talk about it. That one TM made us love Universal!