Well I'm taking my 4 children to Flying Fish. We have eaten at the Coral Reef many times and while it is great fun- our last trip found the food to be just eh. So we thought we would try something we used to like pre-kids. We are eating earlish around 6.
I've never eaten at Flying Fish, but we did Coral Reef last year. We agree with pp; we found the food to be just so-so. Actually bordering on bad (we love seafood). The atmosphere is cool, but we didn't book Coral Reef this year.
While both are kid friendly, I think Coral Reef is more so given the setting. For food, hands down Flying Fish. This is becoming one of my favorite restaurants on property.
I think it depends on your children. Do they need "entertainment" while they eat? Will they expect something "Disney" like at dinner? I also think the time at which you eat will depend on the crowd. FF gets a lot of conference folks coming over from YC/BC and Swan/Dolphin. Not to mention the price of the food is considerable different. Will you be able to enjoy a fine meal with your kids?