Depends where you are. In front of the castle, you want to be 60-90 minutes early. As you go down Main St, you can get there later and later, but still want to be there at least 30 minutes ahead. If you don't mind being in non-prime viewing spots, such as behind the castle or in Frontierland, you can wait until the last minute.
Putting kids on shoulders isn't "wrong", but just be courteous to those around you. If you're there first and nobody is behind you, go for it. But if someone is behind you and you don't have a kid on your shoulders, I say don't put them on when the show starts. My kids are too old for that now, but when they were younger, that's the rule we followed. If someone tried to get in behind me after a kid was on my shoulders, oh well. But I wouldn't knowingly block the view of someone who was there before us. I did my best to be sure I wasn't in someone's direct line of sight. I have had to deal more than once with the flip side...a parent tries to shove in front of us and put a kid on their shoulders. Not gonna happen...