We were at WDW in May, my niece's and nephew's first trip. They are 3 1/2 year old twins and they were terrified of any and all characters no matter where they were (Sesame Place, Great Adventure, birthdays, holidays, fairs) until a few months before our visit when they actually wanted to take picture with Santa (they had refused only 1 month before). My sister had Elmo for their 2nd birthday and they would not go near him, same thing with Santa 1 month later. They still think both Elmo and Santa live at Uncle Tony's house, upstairs, LOL.
Anyway, my nephew went straight up to Goofy at Chef Mickey's and asked for an autograph and took a picture with Goofy. On the other hand my niece was very afraid, only going up to Goofy with her hand tucked firmly in mine and did not really want anything to do with him. But after she met Minnie at the table, where Minnie came up to her brother first and was nice to him and gave her some time to warm up she was okay. In fact we spent most of the week chasing characters for pictures and autographs everytime the kids saw them. This is something we did not expect at all given their past history.
I guess the moral of my little story here is you never know what to expect. We really thought they might be afraid and were pleasantly surprised at the outcome. We did talk to them about having dinner with Mickey and Pooh and Breakfast with the princesses and they said that they wanted to do it, but we were prepared to ask the characters to stay at a distance if they were still shy.
I hope the next trip goes well for you. The only thing I can suggest is try to expose them to the characters as often as possible.