I've not stayed at the All Star Resorts before - but the moderate ones are v nice - especially both Port Orleans ones. For that amount of money an upgrade will definitely be worth it. You will have slightly larger rooms, a more relaxed theming, a sit down restaurant, and a pool slide. Plus, if you stay at one of the Port Orleans Resorts, you will also have the boat ride to downtown disney.
I think you will love it whichever one you stay at. The convenience of staying on-site is so worth it. But, with small children it is best to take a break at your resort in the afternoon, so you may use the amenities of a moderate more.
Have fun planning your first trip - these boards are a wonderful resource. When are you going to WDW?