I agree, look carefully at Ryanair (and other LCC) baggage fees. Many times, BA has a similar price. Since you will be on/off bus/train/etc., I HIGHLY recommend limiting luggage to 1 backpack/totebag and 1 carryon rolling suitcase per person. We just got back from a 2 weeks cruise Italy/Greece and it CAN be done. We took our 3 kids last year for 3 weeks, as well. If you watch any Rick Steves shows, etc., the mantra is pack light! I wore black capris/thin shirts with cardigans most days. You can alwasy choose to check your carryon bags for the international portions, but having only carryons is so much easier and hauling luggage to/from bus/hotel/ etc. is much better.
re. kids in Venice--there are a lot of interesting places--I would plan on staying an extra night--you'll be able to find something--then fly to London. My kids (9-14) liked Rome/Ruins and Tuscany area the best--so, you still might consider an extra day or two on your in-bound. Pompeii is pretty awesome--so, if you can get there, I would do it. If you needed to stay in Rome, there are shuttles right to Pompeii--look on viator.com under Rome for the day trip (I have booked day tours thru them numerous times all over Europe). My kids also loved London--so much to do and see.
re. kids in Venice--there are a lot of interesting places--I would plan on staying an extra night--you'll be able to find something--then fly to London. My kids (9-14) liked Rome/Ruins and Tuscany area the best--so, you still might consider an extra day or two on your in-bound. Pompeii is pretty awesome--so, if you can get there, I would do it. If you needed to stay in Rome, there are shuttles right to Pompeii--look on viator.com under Rome for the day trip (I have booked day tours thru them numerous times all over Europe). My kids also loved London--so much to do and see.