We had multiple failed attempts at Fantasmic with our daughter. It wasn't until she was 5 that she made it all the way through (and she was VERY proud of herself.)
In addition to being very loud, the villains can be pretty intense, especially when Jafar turns into the snake and the dragon comes out on stage, breathing fire. But Mickey being in danger seemed to be the biggest concern for our daughter.
I agree with one of the posters above- give it a try, but be prepared to make a hasty exit.