I had the late seating with my 2 year old and I am Still unsure about how to advise you on this one:
PROS:
no rushing
being able to take your formal/character pictures early (5ish, I believe) while others are getting ready for the early dinner.
Having the kids awake for the early shows...although the only one my daughter actually sat through was Disney Dreams because of all the characters, costumes...etc...
the others were a bust, she lasted maybe 15 minutes and that was one of the reasons we didn't request an early seating ..I thought she'd love the shows with all the characters but really only one show had them.
CONS:
Tired, kids
hungry kids
kids who couldn't and didn't wait to eat (this could also be a pro) you can order room service or have the kiddos have an early supper at Pluto's to hold them until the big dinner) then they could eat or just have dessert.
My little one would just about be at meltdown level and one of us always took her in the stroller and stolled her until she either fell asleep. or unfortunalty I sent my husband for dinner and I ended up eating late in the room.
Either way it's just PLAIN HARD to travel with little ones and be on anyone elses schedule (dinner/shows) you just have to play it by ear!
GOOD LUCK!